SME buyer credit

Insures repayment of principal and interest to a bank loan financing buyers of Danish SME exporters,

Eligible SMEs:

1. Less than 250 employees
2. Less than EUR 50 million in revenues and/or less than EUR 43 million in equity
3. Up to 25% of shares may be owned by a non-SME company

Amount: Up to DKK 25 million

Cover: Up to 100%

Deductible: Exporter covers at least 10% of the commercial and political risks

Tenor: From 181 days to 5 years for exporters and buyers in OECD countries

For transaction less than DKK 5 million, exporter signs a declaration covering environmental and human rights

Premium: Case-by-case

Buyer credit

Guarantee to a bank loan financing a foreign buyer of Danish goods and services

Cover: Up to 95% of bank’s loss for both political and commercial risks

Tenor: Per OECD standards

Amount: No limits

Premium:

• Priced according to buyer’s country, tenor, and buyer credit quality
• For guarantees less than DKK 25 million, fixed premium model ranging from 0.2% per annum to 4.5% per annum
• Premiums may be financed in the commercial loan amount

Supplier credit

Insures non-payment by foreign buyers and allows Danish exporters to extend payment terms to foreign buyers

Cover:

• Comprehensive political and commercial risks
• Up to 90% loss

Tenor: Extended payment terms to foreign buyer of at least 6 months

Premium: Pricing based on credit quality of foreign buyer, tenor of the commitment, and other factors

Other products

Project finance guarantees:

• Follows OECD guidelines regarding tenor, legal and financial due diligence, and permitted tenors
• Cover: Between 30%–80% of the loan

Financing guarantee:

• Allows an exporter to arrange financing for bills of exchange and L/Cs through its bank to monetize export sales
• Premiums range from 0.2% in high income countries to 4.25% in riskier countries Amount: No limit
• Cover: Up to 95% of bank loss
• Tenor: Minimum of 181 days for underlying L/C or bill of exchange; if buyer is from OECD country or the order exceeds DKK 5 million, or the underlying transaction is supported by a L/C, the credit period must be greater than 2 years

Operating lease guarantee:

• Allows exporter to offer buyers the option to buy or lease equipment
• EKF guarantee is issued directly to Danish exporter
• Premium: Ranges from 0.5% to 4.25% per annum
• Tenor: Lease must be for at least 6 months
• Cover: Up to 90% and excludes return of asset or its residual value

Working capital guarantee:

• For exporters to secure bank credit to pay for costs to develop exports
• SMEs pay premium set by the EU
• Cover: Up to 50% of bank loss
• Tenor: Up to 3 years
• Amount: No minimum; upper limit is 80% of liquidity needs to manufacture an order

Capital expenditure guarantee to invest in new machinery, production facilities, or foreign subsidiaries

L/C guarantee:

• Allows banks to confirm L/Cs where country risk would otherwise be unacceptable
• Tenor: Up to 2 years
• Cover: Ranges from 50% to 95% of bank loss

Bond guarantee: Covers unjustified call on exporter bid, advance payment, or performance bonds; covers up to 90% of exporter's lost compensation

Contract guarantee: Protects against loss if exporter is unable to deliver a project to a foreign buyer due to conditions in the country or if the customer defaults on the contract; covers up to 90% of loss

Reinsurance guarantee:

• Provides a solution when private credit insurance companies do not want to assume the entire risk
• Cover is 90%
• Amount: Up to DKK 50 million per buyer; no limit on number of buyers
• Tenor: Greater than 180 days delivery period
• Premium: Determined by country risk category and amounts to 0.9% of turnover for the lowest-risk countries and 1.4% for the highest-risk countries.
• Deductible: 15%"

Investment guarantee:

• Protects companies against loss due to political risk for Danish companies investing in foreign companies or setting up subsidiaries overseas
• Tenor: Between 3–5 years
• Amount: No limit; investments over DKK 25 million requires EKF assessment of investor’s approach to environmental and human rights Cover: Up to 95% loss
• Premium: Determined case-by-case; fixed premium offered up to 5 years