Find suitable buyer credits for your bigger export orders quickly and easily too
Finding a buyer credit can be difficult and time consuming.
Not every German (or European) bank is active in every geography, risk appetite varies from bank to bank, and minimum volumes also vary.
We save you from having to communicate with a large number of banks. Enter your request once and receive suitable offers.
Basic knowledge of buyer credits ("Buyer's Credit")
Buyer credits are an attractive option for your customers, in particular in emerging and developing countries, to finance capital goods in the medium to long term. Borrowers are directly your foreign buyers.
Credit institutions based in Germany frequently grant buyer credits to finance German and international exports only for credit amounts of EUR 10,000,000 and above. Tendentially, this limit is shifting further and further upwards.
At TraFinScout we know which banks are active and attractive in which geographies and from which loan amounts!
Buyer credits for goods with at least 50% German origin are covered by an export credit guarantee of the Federal Republic of Germany, the "Hermes Cover". This is why they are also referred to as covered buyer credits.
For importers from EU and other OECD countries, financing can be secured both with Hermes Cover (not so common here) and with private credit insurance (e.g. Atradius, Coface, Euler Hermes).
In the case of a buyer credit, the borrower and the payee are not identical. The loan is paid out directly to you as the exporter on a pro rata basis or according to the progress of construction (exception: advance payments already made and included in the loan amount can also be paid out to the importer). If the creditworthiness of the importer cannot be checked sufficiently, a bank in the borrower's country can be called in. Such a bank receives a favourable (refinancing) loan from a bank in Germany or Europe against the Hermes cover and concludes a separate loan agreement with the importer. In this case, the importer pays off his local loan with the foreign bank, which in turn pays off the buyer loan with the bank domiciled in Germany or Europe (so-called bank to bank loans).
The loan agreement underlying the buyer credit is oriented on the details of your export transaction. The transaction must be designed according to the so-called OECD consensus. This means, for example, that the importer has to make an initial and / or interim payment of at least 15% of the order value. A maximum of 85% of the contract value can be financed as buyer credit.
The interest and the costs of the Hermes Cover, as well as the processing fee ("Management Fee") and the commitment interest ("Commitment Fee") are borne by the borrower. Even so, this form of financing is very interesting for your buyers, because the total cost is usually less than locally, longer terms are possible and your buyers usually do not have to provide collaterals.
As exporter, you are not the borrower. Thus, the legal relationship between you and the lending bank is limited to statements and obligations that are self-evident. You are responsible for ensuring that your business is properly completed and executed.
Tip: Involve us at an early stage of negotiations of your deal and thus offer your buyers an attractive financing option at an early stage.
- Elimination of the risk that the importer (customer) does not pay (no credit risk)
- No currency risk
- No country risk
- Immediate inflow of liquidity: Buyer credits are disbursed directly to you and intermediate and interim payments are possible.
- Hermes cover or cover from another government export credit agency (ECA) or private credit insurer is mandatory. Their decisions usually take some time.