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SME Guarantee

An SME Guarantee ensures that foreign companies have the necessary financing to buy Danish goods. The guarantee is given to a bank which then gives credit to the foreign company. The guarantee covers up to 100% of the bank’s potential losses.

  • Advantages of SME Guarantee

    Advantages for you as an exporter
    An SME Guarantee helps your company land export contracts.

    With an SME Guarantee, your company, in association with your bank, will be in a position to offer your foreign buyer an extended credit period in which to pay for specific export orders.

    Your company receives the money when you supply the goods and the bank receives an EKF guarantee covering up to 100% of the risk.
    Advantages for you as a buyer of Danish goods
    You get access to an attractive loan from a Danish bank. You can get credit for up to five years. Thus, you can buy the products you want for your business to grow – as long as it is from a Danish company.
     
    Advantages for you as a bank
    You can help your customer boost their sales. This makes your customer, while at the same time allowing you to increase your business volume by issuing a loan on which you receive interest as always, but without any risk. If something goes wrong, EKF covers the loss.
  • What is SME Guarantee?

    ​An SME Guarantee is aimed at small and medium-sized export companies.

    This guarantee gives Danish companies better opportunities to offer a customer abroad long-term credit on a specific export order.

    The objective is to generate more business.
    The exporter’s bank gives the foreign customer credit. And to ensure that the bank is willing to give credit to a foreign company, EKF guarantees for the payment.

    This means that in the event the buyer does not pay as agreed, EKF covers the bank’s loss.
    This allows the bank to finance the transaction without incurring risk.
  • How does SME Guarantee work?

    ​EKF issues a guarantee to a Danish bank or a foreign bank to cover the risk of the credit being offered. By doing so, we take over the main part of the risk. With the backing of EKF, the bank will be able to offer your customer a credit.
    ​The customer can now afford to place an order with your company. Although the customer is being offered a credit, you will be paid immediately.
  • What does SME Guarantee cost?

    How much?
    EKF charges a premium for the guarantee. It is the foreign customer who pays the premium.
     
    The size of the premium depends on the country, the credit-worthiness of the customer, the currency, the general market conditions and the repayment term.

    You can easily calculate the premium on our website.

    In addition to this, the customer pay rates and charges for the credit.
     
  • Terms & conditions regarding SME Guarantee

    Who is eligible for an SME Guarantee?
    A bank that provides credit for a foreign buyer of Danish goods.

    The Danish company must be a small or medium-sized export company, i.e. companies
    - with fewer than 250 employees
    - with less than EUR 50 million in turnover and/or
    - with less than EUR 43 million in balance and
    - a maximum of 25% of its shares may be owned by a company that does not fulfil the SME criteria.
     
    The foreign buyer must be creditworthy.
     
    How much does an SME Guarantee cover?
    EKF can guarantee contract amount of up to DKK 25 million.
     
    What is the term?
    EKF issues an SME Guarantee with the duration of up to 5 years. The credit period must be at least 181 days.
    If the buyer is from an OECD country and if the order is more than EUR 5 million, the duration must be at least 2 years.
     
    Conditions
    Usually, the foreign customer must pay at least 15% of the order in advance.
     
    Environmental and social sustainability
    When the transaction with EKF totals more than DKK 5 million we assess the risks related to the environment and human rights in the transaction.

    ​What does EKF cover?
    EKF’s guarantees cover risks which banks are either unable or unwilling to cover. EKF pays out compensation if the Danish company or the bank makes a loss on an export transaction as a result of commercial or political risks.

    Commercial risk occurs when the buyer is unable to pay due to liquidation or insolvency. EKF must rate the foreign buyer as creditworthy before we can issue a guarantee.
    Political risk occurs when the Danish company does not receive payment for products due to impediments in the country. Such impediments include war or civil war, currency shortage, restrictions on use of currency, import or export bans, and interventions by local authorities that make it impossible to receive payment for the products.
     
    EKF covers up to 100% of the loss in compensation to the bank. As an exporter, your company must cover a deductible of at least 10% of the commercial and political risks.
     
    Normally, the guarantee is documented by bills of exchange.

Advantages of SME Guarantee

Advantages for you as an exporter
An SME Guarantee helps your company land export contracts.

With an SME Guarantee, your company, in association with your bank, will be in a position to offer your foreign buyer an extended credit period in which to pay for specific export orders.

Your company receives the money when you supply the goods and the bank receives an EKF guarantee covering up to 100% of the risk.
Advantages for you as a buyer of Danish goods
You get access to an attractive loan from a Danish bank. You can get credit for up to five years. Thus, you can buy the products you want for your business to grow – as long as it is from a Danish company.
 
Advantages for you as a bank
You can help your customer boost their sales. This makes your customer, while at the same time allowing you to increase your business volume by issuing a loan on which you receive interest as always, but without any risk. If something goes wrong, EKF covers the loss.

What is SME Guarantee?

​An SME Guarantee is aimed at small and medium-sized export companies.

This guarantee gives Danish companies better opportunities to offer a customer abroad long-term credit on a specific export order.

The objective is to generate more business.
The exporter’s bank gives the foreign customer credit. And to ensure that the bank is willing to give credit to a foreign company, EKF guarantees for the payment.

This means that in the event the buyer does not pay as agreed, EKF covers the bank’s loss.
This allows the bank to finance the transaction without incurring risk.

How does SME Guarantee work?

​EKF issues a guarantee to a Danish bank or a foreign bank to cover the risk of the credit being offered. By doing so, we take over the main part of the risk. With the backing of EKF, the bank will be able to offer your customer a credit.
​The customer can now afford to place an order with your company. Although the customer is being offered a credit, you will be paid immediately.

What does SME Guarantee cost?

How much?
EKF charges a premium for the guarantee. It is the foreign customer who pays the premium.
 
The size of the premium depends on the country, the credit-worthiness of the customer, the currency, the general market conditions and the repayment term.

You can easily calculate the premium on our website.

In addition to this, the customer pay rates and charges for the credit.
 

Terms & conditions regarding SME Guarantee

Who is eligible for an SME Guarantee?
A bank that provides credit for a foreign buyer of Danish goods.

The Danish company must be a small or medium-sized export company, i.e. companies
- with fewer than 250 employees
- with less than EUR 50 million in turnover and/or
- with less than EUR 43 million in balance and
- a maximum of 25% of its shares may be owned by a company that does not fulfil the SME criteria.
 
The foreign buyer must be creditworthy.
 
How much does an SME Guarantee cover?
EKF can guarantee contract amount of up to DKK 25 million.
 
What is the term?
EKF issues an SME Guarantee with the duration of up to 5 years. The credit period must be at least 181 days.
If the buyer is from an OECD country and if the order is more than EUR 5 million, the duration must be at least 2 years.
 
Conditions
Usually, the foreign customer must pay at least 15% of the order in advance.
 
Environmental and social sustainability
When the transaction with EKF totals more than DKK 5 million we assess the risks related to the environment and human rights in the transaction.

​What does EKF cover?
EKF’s guarantees cover risks which banks are either unable or unwilling to cover. EKF pays out compensation if the Danish company or the bank makes a loss on an export transaction as a result of commercial or political risks.

Commercial risk occurs when the buyer is unable to pay due to liquidation or insolvency. EKF must rate the foreign buyer as creditworthy before we can issue a guarantee.
Political risk occurs when the Danish company does not receive payment for products due to impediments in the country. Such impediments include war or civil war, currency shortage, restrictions on use of currency, import or export bans, and interventions by local authorities that make it impossible to receive payment for the products.
 
EKF covers up to 100% of the loss in compensation to the bank. As an exporter, your company must cover a deductible of at least 10% of the commercial and political risks.
 
Normally, the guarantee is documented by bills of exchange.
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