Trade Credit Insurance vs. Exim Bank Restrictions
Companies seeking to mitigate their risk on foreign receivables sometimes find themselves having difficulty in differentiating trade credit insurance from the services offered by Exim bank. On the surface, there appears to be little difference in the function of Exim bank compared to private firms offering trade credit insurance. Exim bank was established as the Federal Government’s way of trying to help businesses offset risk and actively encourage exports of American goods.
Some services offered by Exim bank parallel those offered by trade credit insurance firms. However, the major difference in the two is the simple fact that the Exim bank is a part of the US Government, and anything attached to the federal government means regulation. The drawbacks of using the services of Exim bank are many. In addition to the high expense typically associated with an Exim bank policy, as a part of the US Government, Exim bank has numerous regulatory hurdles that must be overcome, while trade credit insurance is a simple contract between two private companies allowing for the most flexibility. Additionally, Exim bank has on more than one occasion received negative press indicating that it discriminates politically by offering its services to those special interests that powerful political groups favor while leaving those without such connections to fend for themselves.
Any company trying to decide between the services of the Exim bank and acquiring a trade credit insurance policy privately would do well to consider the political ties of the Exim bank. A company wishing to control its risk without being forced through extra regulatory hoops or being required to do business with only those parties favored politically would do well to keep in mind that a private trade credit insurance policy allows a company greater flexibility to do business as they are usually accustomed. Using Exim bank can mean the possibility of navigating a political swamp causing frustration for policyholders.
Have a question or comment about trade credit insurance? Feel free to contact us using the form to the right or call 1-844-315-4985.
Copyright © | All Rights Reserved
Business Credit Reports
Trade Risk Strategies is affiliated with Experian, providing business credit reporting, business credit scoring & business credit monitoring to our clients. Our affiliation offers a robust annual subscription on business credit reports for the fraction of the price of other companies. You will have access to more than 27 million credit active businesses to learn the credit worthiness of customers, suppliers, or partners, instantly.
Our relationship with Experian allows you discounted pricing. For only $2,990 annual subscription, you may access up to 60 business reports per month, having access to the following information on a business:
- Business Background Information
- Comprehensive Financial Information
- Credit Risk Factors
- Banking, Trade & Collection History
- Past Liens, Judgements, Business Registrations & Bankruptcies
- Uniform Commercial Code (UCC)
Click on the following banner to obtain sample reports and this special offer:
