05.02.2023 | Federal Ministry of Finance
The Federal Ministry of Economics and Climate Protection and the Federal Ministry of Finance have agreed on an instrument to promote foreign trade that supplements the federal government’s export credit guarantees (Hermes Cover).
Regular federal export credit guarantees can be granted if German companies supply products to foreign buyers. To finance the purchase, the buyer takes out an export loan from a German bank. The bank checks the creditworthiness of the foreign customer beforehand. The federal government guarantees the bank for this loan, ie in the event of insolvency on the part of the foreign customer, the federal government will reimburse the bank for most of its bad debts.
This instrument makes it easier for German companies to conclude delivery deals with foreign companies – a tried and tested instrument for promoting foreign trade. In 2022, the federal government granted export credit guarantees of around EUR 15 billion.
Small Tickets – Forfaiting Guarantee
With the forfaiting guarantee, the federal government now offers a supplementary instrument for small-volume export transactions below EUR 10 million. It is a simplified form of export financing for the banks.
In the first step, the German exporter grants his foreign customer a supplier credit. In the second step, the bank buys this receivable from the exporter (forfaiting) and thus provides the exporter with new liquidity. The federal government guarantees the bank for this claim, ie if the foreign customer becomes insolvent, the federal government reimburses the bank for 80 percent of the bad debt.
It is planned to introduce this forfaiting guarantee by the end of the second quarter of 2023. In this way, the federal government gives export-oriented SMEs noticeable liquidity leeway and thus strengthens German SMEs.
(BMF / STB Web)