VDMA Feasibility Check: Insuring payment terms
If prepayment and letter of credit are not suitable for export, the only option is to check whether the terms of payment are secured by public Hermes cover, the socalled export credit guaranties.
Such a preliminary check has the advantage that it is easier to respond to the customer's financing requirements. Often the Hermes application has to be made suitable and this can only be done in consultation with the customer. The VDMA info sheet describes the following test steps:
- Step 1: Does the country risk match the Hermes cover?
- Step 2: Does the customer's financing concept correspond to the Hermes cover?
- Step 3: Does the project fit in with the Hermes coverage?
- Step 4: Take advantage of advice on your own feasibility check
The check saves time and can give clear messages in the negotiations. As a rule, the export transaction must meet special requirements in some points so that the Hermes will cover the risk.
Dr. Susanne Engelbach will be happy to send you the VDMA feasibility check: "Secure payment terms with Hermes cover" (in German).
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