Support of SMEs
Small and medium-sized enterprises (SMEs) represent a significant customer base for EGAP and the support of their export activities belongs among the insurance company's priorities..
Due to the rules for state-supported exports, which limit the scope of state credit insurance companies in the area of state support for exports to only that part of the market not covered by commercial credit insurance companies, the focus of EGAP's support for SMEs lies mainly in the area of insurance of credits for financing production for export (insurance of pre-export credits) and bank guarantees issued in connection with export contracts.
The speed of arranging a credit to finance production for export or guarantees, without which it is very often not even possible to seek an export supply (export contract), is one of the decisive factors and EGAP, in cooperation with some banks, therefore offers SMEs a significantly simplified insurance procedure:
- credits to finance production for export, including the financing of investment in production for export,
- guarantees for the exporter's obligations in connection with the terms of obtaining or performing an export contract.
The agreement with banks simplifies the process of analysis and risk assessment of producers/exporters applying for a pre-export credit or bank guarantee. Contrary to common practice, EGAP requires less documentation from the producer/exporter for the analysis, as most of it is received from the cooperating bank, and if the amount of insurance requested is within the limit set per producer/exporter, EGAP insures the pre-export credit or bank guarantee in a shortened process. The time required to arrange insurance or conclude an insurance contract is reduced to the minimum necessary thanks to the insurance contract templates agreed with the banks. The simplified method of insuring pre-export credits and bank guarantees is offered by EGAP in cooperation with these banks:Česká exportní banka
EGAP cooperates with the Czech Export Bank, the National Development Bank and with commercial banks on the product specially designated for the small and medium-sized enterprises which are producers and suppliers of sub-deliveries for larger exporters. This product makes use of synergic effect of mutual cooperation when state institutions validate reliability and creditworthiness of a sub-supplier from the SME category and in this way substantially reduce risks of commercial banks in financing of production for export.
As regards insuring against the risk of non-payment of invoices for goods or services delivered, it depends on the length of their maturity (deferred payment) and the buyer's country. Deferred payment of up to two years to a buyer in a commercially insurable country (e.g. all EU and OECD countries) is normally insured by commercial credit insurers.
For other cases, EGAP offers insurance of a short-term export supplier credit ("B") and if the exporter intends to sell a short-term export receivable to the bank before its maturity, insurance of a short-term export supplier credit financed by a bank ("Bf") can be used.
EGAP insurance products are intended for all exporters of goods and services regardless of their size, legal form and export volume. Thus, SME clients can make use of a full range of state-supported insurance, provided that the basic conditions are met:
- the applicant for insurance is registered as a taxable entity in the Czech Republic,
- a Czech share in the total export (more can be found here),
- export-related risks are commercially uninsurable.