Cash in advance and letters of credit are no longer competitive terms in the international marketplace. Creditworthy foreign companies, accustomed to buying on open account from their other suppliers, are going to expect the same terms from you. Your customers in emerging markets, on the other hand, may face scarce capital and high interest rates, making it difficult or impossible to order your products without credit terms.

You need to extend competitive terms to grow your international business, but what happens if you don't get paid? Your foreign customers could file bankruptcy, run into cash flow problems, suffer from currency devaluations, or fail to pay you for a variety of other reasons. You can protect your foreign receivables against non-payment risks with an export credit insurance policy.

Export credit insurance protects your foreign receivables against commercial and/or political risks which could result in non-payment of your invoices. Commercial risks take the form of buyer insolvencies (e.g. bankruptcy) or protracted defaults (slow payment). These problems could occur for many reasons, such as fluctuations in demand, natural disasters, or general economic conditions in your customer's country. Political risks include war, riots, and revolution, as well as currency inconvertibility, expropriation, and changes in import or export regulations.

All of your export receivables can be insured under one multiple-buyer policy, or in some cases you can purchase key-buyer or single-buyer coverage. Export sales of all types of products may be covered, regardless of content or where the products are manufactured. Any kind of exporter can apply for receivables insurance, including manufacturers, distributors, dealers, etc. Your foreign customers don't need to be huge corporations or government agencies; any buyers can be considered as long as they are creditworthy, as determined by financial information, trade references, or in some cases simply your company's own ledger experience.

Premium rates are based on the terms you extend, the spread of your buyer and country risks, and your previous export experience. The cost is low, typically a small fraction of one percent based on sales volume . . . in most cases considerably less than the fees charged for letters of credit.

Rates may be calculated as a function of your shipment volume, country and buyer credit limits, or outstanding receivables. Premiums are payable monthly, quarterly, or annually.

Whether or not you pass this incremental expense on to your customers, the price of the coverage is insignificant compared to the additional business you can win by extending competitive credit terms overseas.

All export insurance policies sold by Meridian are fully backed by either the U.S. government or top-rated commercial insurance companies.

Specializing in this kind of coverage, Meridian offers a complete selection of policies from every insurance company and government agency that underwrites export credit insurance.

Strong underwriting relationships enable Meridian to quote the most competitive premium rates in the market, with no added processing charges or broker fees.

By monitoring how you are using your policy, Meridian can help you keep your export credit insurance coverage up-to-date as your export business grows.

Meridian can supply credit reports on your international customers, offer training in foreign credit evaluation, assist with policy compliance and administration, and provide ongoing support for your sales, credit, and finance departments.

INCREASE YOUR EXPORT PROFITS: Grow your export sales by making it more economical for your foreign customers to purchase larger quantities. Shipping larger orders helps you negotiate better pricing from your suppliers, make longer manufacturing runs, and transfer inventory carrying costs overseas.

PENETRATE YOUR TARGET MARKETS: Open new markets which your company might otherwise perceive as too risky for extending credit terms. The opportunity to establish market share in emerging economies has never been greater.

GET MORE FROM YOUR DISTRIBUTORS: Negotiate stronger overseas representation by offering competitive terms to your foreign distributors. Provide incentives to keep more of your products in the supply chain, increasing your market share and local brand recognition.

ENHANCE YOUR BORROWING CAPACITY: Obtain more favorable financing by including your insured foreign receivables in your borrowing base. Export credit insurance makes your international receivables more attractive to your bank or other lenders. You can assign policy proceeds to the lender of your choice.

STRENGTHEN YOUR BALANCE SHEET: Keep your company's financial position secure, despite exposure to unforeseen events, concentrations of foreign credit risks, and changing international market conditions. Insuring your foreign receivables may also enable you to reduce your bad debt reserves. Export credit insurance can help facilitate the "true sale" of your international receivables per FASB 125, as well as supporting asset securitization.