Finnvera solutions for export transactions

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Presentation transcript:

Finnvera solutions for export transactions 204.2018 Jari Ihamäki Finance Manager – Growth and Internationalisation team

Finnvera supplements the financial market and helps Finns to create something new. 17.11.201817.11.2018

Benefits of export credit guarantees To exporters To borrowers To lenders Payment is received on cash terms, protects against credit risks Enables the availability of long-term financing Protects against credit risks

Risks covered Political risk Commercial risk Restrictions on currency transfers or currency change Insolvency of a State Expropriations War, insurrection or some other state of emergency Commercial risk The buyer’s inability or unwillingness to pay

Map of country risk categories Country classification 0. Advanced economy 1. Very low risks 2. Low risks 3. Relatively low risks 4. Intermediate risks 5. Relatively high risks 6. High risks 7. Very high risks http://www.finnvera.fi/eng/Export/Export-Credit-Guarantees/Country-classification-and-map2 Country policies No restrictions Flexible country policy Restrictive country policy Country policy defined separately

Exporter Buyer Finnvera Exporter’s bank Case 1. Arranging payment period for customer - Export Receivables Guarantee Selling leather made accessories to Saudi-Arabia – contract size 15 t€ per delivery Payment term invoice with 3 months payment period Continuous credit limit – delivering every 3-4 months Exporter Invoice Buyer Payment term 90 days Export Receivables Guarantee (Covers 90 % of invoice) discounting of invoices (factoring) Payment Finnvera Transfer of Rights Exporter’s bank 17.11.201817.11.2018

Confirming (Finnish) bank Issuing (foreign) bank Case 2. - Letter of Credit (L/C) Guarantee – with 1 year payment term Selling machines and equipment to Iran – contract value 1,5 m€ Payment term Letter of Credit with 1 year payment period Exporter Delivery contract Buyer Irrevocable L/C as the term of payment Discounting the L/C – instant payment for exporter Request to issue an L/C - Payment term 360 days Confirming (Finnish) bank Issuing (foreign) bank Request to confirm an L/C Letter of Credit Guarantee Finnvera 17.11.201817.11.2018

With an idea worth pursuing, turn to us for financing. Thank You.