New guarantees in response to the Covid-19 pandemic
The measures taken by EKN are more extensive than those implemented during the 2008 financial crisis. The needs are broader, and companies of all sizes are significantly affected.
EKN’s guarantees are offered to exporting companies of all sizes, and to their sub-suppliers. To further facilitate Swedish companies’ access to finance, EKN now offers the following:
Guarantees during the Coronavirus crisis
1. Improved access to working capital credits for small and medium-sized enterprises
With the working capital credit guarantee, EKN covers the bank’s risk when the bank provides working capital in the form of loans, invoice discounting or overdraft facilities. This makes it easier for companies to obtain loans from their bank. The company’s bank applies for the guarantee. The borrower must complete and submit a supplementary form as an appendix to the application.
EKN has now increased the coverage ratio to 80 per cent - the bank only needs to take 20 per cent of the risk. Both exporting companies and their sub-suppliers can benefit from this extended guarantee. Read more
2. New working capital credit guarantee for large companies
EKN is temporarily offering a working capital credit guarantee for large companies, called the Individual Credit Guarantee. This is a guarantee that is only requested in times of crisis. It covers 75 per cent of the bank’s risk when providing working capital financing to large companies. Companies can apply in advance for a working capital credit limit offer with EKN. This limit can then be called on by a designated lender through submitting an application. It is also possible for the lender to apply directly, without the company first applying for a limit. The borrower must complete and submit a supplementary form as an appendix to the application. Read more
3. Guarantee for supply-chain financing
The working capital credit guarantee for large companies can also cover the bank when the bank’s financing is intended for the company’s sub-suppliers. The purpose of the credit should be to support the company’s sub-suppliers by enabling them to receive faster payment than under the terms specified in the agreement between the company and the sub-supplier. When the financing relates to payment to sub-suppliers, the guarantee covers 80 per cent of the bank’s risk.
The bank applies for the guarantee. The borrower must complete and submit a supplementary form as an appendix to the application, stating that the financing refers to sub-suppliers.
4. Guarantee for short term credits to high-income countries
EKN can temporarily, until the end of June 2021, guarantee also short-term supplier credits to high-income countries. These transactions, shorter than two years, are normally insured by the private credit insurers. Because of the Covid-19 crisis, EU has decided to allow also Export Credit Agencies like EKN to cover them.
Guarantees always offered by EKN
There are many different risks that can arise in an export transaction. Here you can read about our most requested guarantees and what they cover.
Guarantee for non-payment in supplier credits
- For credit period up to 12 months - Guarantee for trade receivables.
- For longer export credits – Guarantee for Loss on Claim.
- For contract guarantees, such as advance payment guarantees.
- Used by issuing banks to share the recourse risk on the supplier.
- Suppliers to exporting companies can also use this guarantee.
EKN also offers guarantees for banks’ confirmed letters of credit, discounted bills of exchange and loans to the buyer in an export transaction. Exporting companies can insure the risk of cancellation and unfair calling of a contract guarantee. We also have a guarantee for investments abroad, as well as a guarantee for investment credits that facilitate access to financing when investing in production facilities and machines in Sweden.