Export financing and insurance are tools that address two problems for an exporter: the need for working capital for production before payment is received, and the risk that a foreign customer will not pay. Receivables insurance covers part of the loss in the event of non-payment for both commercial and political reasons, and it also brings a check on the customer's creditworthiness, which is valuable in itself with an unknown partner. Financing takes the form of export loans, guarantees or the purchase of a receivable. In Slovakia, these services are provided by a specialised bank together with commercial insurers. An alternative for smaller deals is payment terms – payment in advance, a letter of credit or an advance payment – which reduce the risk without additional costs, although they may put off some customers. For a first deal with a new customer, it is worth combining both: a creditworthiness check and a partial advance payment, until the relationship has been verified through several deliveries.
See also: Repayable financial assistance, Bank guarantee and preferential loan, Pricing for foreign markets.
