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Short-term credit insurance extended to small business exporters

The Government has opened up its short-term credit insurance to smaller export contracts, including the exporters of manufactures and intermediate goods and on contracts as low as £20,000, making exporting opportunities more accessible to small and medium-sized businesses.

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The Government has opened up its short-term credit insurance to smaller export contracts, including the exporters of manufactures and intermediate goods and on contracts as low as £20,000, making exporting opportunities more accessible to small and medium-sized businesses. Read on to find out how to access this support. An export insurance policy insures an exporter against the risk of not being paid under an export contract or of not being able to recover up to 95% of the costs of performing that contract because of certain events which prevent its performance or leads to its termination. In carrying out the contract, the exporter may incur costs before delivering goods and providing services to the buyer, such as buying raw materials, manufacturing parts or hiring staff. The policy provides cover against the exporter not being able to recoup those costs because of the occurrence of an insured risk which leads to the contract's termination or prevents its performance. As goods are delivered, the exporter may become entitled to payments under the terms of the contract. The policy provides cover to the exporter against non-payment of those amounts. Areas covered Under the policy, an exporter is covered against loss suffered due to specific risks, including: insolvency of the buyer the buyer's failure to pay any amount due under the insured contract within six months of its due date the buyer's failure to meet its obligations under the insured contract political, economic or administrative events outside the UK that prevent payments from the buyer under the insured contract being converted into sterling or transferred to the UK hostilities or civil disturbances outside the UK that affect performance of the insured contract. There is no fee for applying for the policy and the premium payable for the cover is determined on a case-by-case basis Eligibility For your business to be eligible, the following criteria must be met: the exporter must carry out business in the UK the buyer must be overseas if the manufacturing period under the contract plus any period of credit given to the buyer total less than two years, the buyer must not be in a European Union country or in certain other high income countries the export contract value must be at least £20,000 or the equivalent in foreign currency if the contract is not for semi-capital or capital goods and related services, the exporter must first have attempted to obtain insurance from a private export credit insurer. How to apply Exporters who want to know more about this support should call the ECGD helpline on 020 7512 7887.

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