Trade Finance

Export Credit Insurance
Ex-Im Bank's Export Credit Insurance Program offers you (the exporter) protection against nonpayment by your foreign buyers. These policies are backed by the U.S. Government, and cover 90-95% of commercial risk and 95-100% of political risk. The program also enables you to offer competitive terms that are otherwise unavailable through Letters of Credit.

EX-IM Bank Working Capital Guarantee Program
This program provides exporters with pre-export financial assistance. Small and medium-sized creditworthy customers are able to secure financing for the purchase of raw materials and inventory destined for export, as well as export-related accounts receivables. The program allows banks to incorporate previously-excluded collateral to a borrowing customer, thus increasing their borrowing capacity. Since Sovereign has Delegated Lender status, we can approve loans rapidly in-house.

EX-IM Bank Medium-Term Programs
Ex-Im Bank guarantees provide repayment protection for private-sector loans to creditworthy buyers of U.S. exports. Subsequent to the foreign buyer's 15% down payment, Ex-Im Bank guarantees that in the event of default it will repay the principal and interest on the loan. Repayment terms normally range from one to ten years depending on the export contract value, the product being financed, and the importing country.

Banker's Acceptance
A Banker's Acceptance (BA) is a short-term, fixed-rate loan used to finance the import, export, or domestic shipment of goods. This service offers buyers low-rate financing, importers can finance portions of the trade cycle by deferring payments for purchased goods until the BA matures, and exporters receive immediate payment for goods sold on terms.

Standby Letters of Credit
Standby L/Cs enhance your promise of payment by making Sovereign secondarily liable to your creditors or customers if you are unable to fulfill your contractual or financial obligations.

Export Receivable Financing
Manage cash flow better, reduce risk, extend sales terms, improve competitiveness, and tap a new source of financing for expansion or ongoing operations. In addition to developing a customized program, we can assist in arranging insurance coverage.

Export Receivable Insurance
Protect receivables against commercial and political risk, increase their value as collateral for a loan, and make discounting receivables easier. Sovereign can help to secure optimal, cost-effective coverage, while creating more financing value for your foreign sales.

Forfaiting
Forfaiting is the purchase and sale of negotiable debt instruments (notes), valuable in financing sales to emerging markets and for laying off political and credit risk.

Forfaiting enables you to extend credit to new buyers, and delivers immediate payment with minimal documentation. The notes are typically backed by bills of exchange, promissory notes, standby letters of credit, or time drafts drawn on issuing banks or buyers. Notes are drawn by the exporter and accepted by the importer, and in most cases require an unconditional guarantee from the importer's bank.

(The term “forfaiting” is derived from the French phrase “a forfait,” to relinquish legal rights to an asset—in this case, negotiable debt instruments.)