Insurance for Lenders
Meridian’s services complement those of banks and other lenders. We broker export credit and political risk insurance, structure trade finance transactions, train exporter and lender credit departments, advise on compliance issues, and provide other services that help financial institutions—and their customers—do more international business.
We don’t provide working capital financing, factoring, or other kinds of credit that are widely available elsewhere. In fact, we regularly refer exporters to banks and other lenders for working capital financing, as well as letters of credit, foreign exchange, documentary collections, and other trade services.
In most cases our clients with credit insurance are able to use their policies to borrow from their existing lenders. When this is not the case, or a new relationship is sought, we introduce them to other banks/lenders in their area. Meridian has clients throughout the USA. If you’re a lender interested in financing credit-insured foreign receivables, let us know about your lending parameters and we would be pleased to refer exporter prospects that fit your profile.
Likewise we encourage you to call on Meridian if we can be of service to you or your customers. Or feel free to have borrowers or prospects contact us directly. Meridian brokers credit insurance policies from every underwriter, enabling us to quote your customers the most competitive terms and premium rates. All referrals are handled by Meridian in the strictest confidence and with respect of the relationships between banks/lenders and their customers.
Discounting Letters of Credit: Export L/C insurance protects US banks against nonpayment of letters of credit issued by foreign banks for cross-border trade transactions. Policies can cover confirmation of sight L/Cs and/or discounting of drafts drawn on usance L/Cs. Trade credit insurance enables banks to leverage their capacity for foreign L/C exposures so they don’t have to turn away customers or otherwise miss opportunities to provide their L/C services.
Foreign Buyer Credit Facilities: When lenders offer short-term export finance to companies abroad, usually for revolving purchases from multiple suppliers, they can cover their nonpayment risks with a trade credit insurance policy. In addition to managing a lender’s concentration of risk associated with a single foreign borrower, this kind of facility can engender new business relationships for the lender with the borrower’s US and overseas suppliers.
Foreign Supplier Credit Facilities: Overseas suppliers sometimes get up-front cash deposits from their US customers or trade loans from US banks. But what happens if the goods are never delivered or the foreign supplier defaults on the loan? Trade credit insurance is available to protect against these risks, underwritten based on the foreign supplier’s own financial strength or with the support of a standby L/C issued by a bank in the supplier’s country.
Medium-Term Equipment Financing: Trade credit insurance is purchased by lenders who extend multiple-year loans to foreign companies for their import purchases of capital equipment. Policies can be structured with terms of up to five years. While most policies insure individual loans, some underwriters offer experienced lenders the ability to structure a multiple-buyer facility, including delegated authority and time-saving programmatic terms and conditions.
Cross-Border Equipment Leasing: A funding source can finance a lessor’s foreign lease payment stream by being named as the assignee or loss payee on the lessor’s trade credit insurance policy. Credit insurance policies can be written not only for lessors but also directly for funding sources, captive lenders, or other creditors that want to offer cross-border equipment financing. Alternatively a funder or lessor can finance a vendor’s insured trade receivables.
Factoring/Discounting Receivables: There are two ways to use trade credit insurance with factoring. A seller can purchase its own policy, assign a factoring company as loss payee, and then factor the insured receivables with recourse. Or a factoring company can obtain its own credit insurance policy and discount sellers’ receivables without recourse. Any well-established factoring company with cogent credit procedures can use trade credit insurance.
Deprivation of Collateral Coverage: In order to offer medium-term loans, equipment leasing, or other kinds of trade finance, cross-border lenders may rely upon liens they’ve obtained on assets located in foreign countries. Collateral deprivation insurance protects against confiscation, expropriation, or nationalization of such assets . . . at any time during the financing term, following a payment default, or at the end of an equipment lease.
Political Risk Insurance for Investors: Political risk insurance is purchased by investors who extend debt or equity financing to projects in foreign countries. Policies can also be written to cover loans made to US companies for investments in their own international operations. Payment defaults or investment losses are covered if they’re caused by expropriation, political violence, currency inconvertibility, or other government actions or political events.
Over the past 25 years Meridian Finance Group has helped scores of lenders and investors—and hundreds of exporters—do more international business using trade credit insurance and political risk insurance.
All policies brokered by Meridian are backed by top-rated insurance companies or by agencies of the federal government (Ex-Im Bank, OPIC, et al). We offer coverage from every underwriter, enabling us to quote the most competitive terms and premium rates in the market.
More significant than Meridian’s ability to place coverage is the comprehensive technical support we provide to lenders. These policies work differently from other kinds of insurance, so Meridian assists with policy compliance at the same time as we help lenders get the most out of their insurance as a sales and risk management tool.
We understand your business. Our staff is multicultural and multilingual, with experience not only in brokering insurance but also export finance, international banking, asset-based lending, equipment leasing, A/R factoring, financial analysis, and credit management.