Small Canadian companies can insure their foreign sales in minutes: EDC

Export Development Canada (EDC) has introduced a new online version of its credit insurance product, enabling Canadian companies to insure their sales to United States or foreign buyers in minutes.

“Canadian companies can now apply, receive a quote, accept and pay for their credit insurance, and do it all online,” says Clive Witter, senior vice president of insurance at EDC, pointing out that the start-to-finish process has been trimmed from hours or days to minutes.

Trade Protect is designed specifically for small businesses, covering sales to foreign buyers up to a value of $350,000 or US$350,000, notes a statement from EDC, Canada’s export credit agency, which provides financing and insurance solutions to help Canadian companies of any size respond to international business opportunities. Canadian companies can choose to cover sales for payment terms of up to 90 days.

EDC reports that credit insurance allows small businesses to insure their sales to foreign buyers to protect them against the risk of not being paid.

The new product allows “a small business that is selling outside of Canada to pre-arrange insurance on a potential buyer when a sales opportunity comes up,” Witter explains. The Canadian company can “sell to them with confidence even if the U.S. or foreign buyer is unknown to them, and to do it in real time, 24 hours a day, seven days a week,” he adds.

Beyond safeguarding the exporting company against risk of non-payment by their foreign buyers, EDC states that by having a sale insured, it may also help the exporting company’s bank provide additional financing because the payment is protected; and it helps the Canadian seller be more competitive by offering more flexible payment terms than its competitors.

“In the case where the payment is not received by the foreign buyer, EDC will pay the Canadian exporter 90% of the invoice value and then seek payment directly from the foreign buyer. If EDC recovers the payment, it pays out the final 10% back to the Canadian company,” the agency reports.