Fundamentals of the Export Credit Guarantees
State export credit guarantees are a key foreign trade promotion instrument of Federal Government. They protect exporters against bad debt losses for commercial or political reasons and in many cases they are a prerequisite for the necessary funding of a transaction to be made available.
Hermes Cover is only to be had where the private industry does not offer appropriate or sufficient insurance cover. Consequently, the Federal Government concentrates on export credit guarantees for emerging economies and developing countries. Hermes Cover helps to open up markets, which are difficult to access, and to maintain business relations in challenging circumstances.
With the provision of Hermes Cover the risk of bad debt losses is, to a large extent, transferred from the exporter and/or the financing bank to the Federal Republic of Germany. For this, the policyholders pay a premium commensurate with the risk.
As a rule, Hermes Cover is available to all German export companies irrespective of the company’s size or line of business.
Transactions of small and medium-sized enterprises are considered to be particularly deserving of support.
Export Credit Guarantees are granted in accordance with national and international regulations and are subject to fulfilment of specific conditions. The two principal criteria for granting a guarantee are a transaction’s eligibility for cover and whether it can be justified on the grounds of the risk involved.
Euler Hermes Aktiengesellschaft is charged with the management of the state export guarantee scheme. It acts as service provider for the government of the Federal Republic of Germany.
Solutions for small and medium-sized enterprises
The Export Credit Guarantees of the Federal Republic of Germany support in particular small and medium-sized enterprises in establishing trade relations with business partners abroad.
The main purpose of Hermes Cover is to provide protection against bad debt losses in connection with supplies to difficult and risky markets.
Besides, as a small or medium-sized enterprise you will also benefit from easier access to export finance.
Foreign business – yes, but on a safe basis