Many companies in the U.S. buy insurance to facilitate various forms of financing available in the market. In addition to insurance placement, IRC helps companies develop relationships with institutions that offer these specialized finance structures, which include:

• End Customer Finance: Banks use credit insurance to provide LIBOR-based loans to foreign obligors that purchase goods from U.S. exporters. These facilities allow the exporter to be funded by the bank upon shipment, sometimes without recourse in the event of a customer default. Short-, medium-, and long-term transactions can be supported. The cost of goods, freight, insurance, and financing are typically packaged and passed to the customer. These structures increase U.S. exporter competitiveness because they can provide lower rates than the foreign buyer can obtain locally.
• Vendor Finance: Lenders use credit insurance to provide LIBOR-based funding to foreign and domestic vendors to help buyers/importers obtain longer terms. These facilities help buyers/importers extend days payable outstanding and improve cash flow. The supplier benefits from improved cash flow, reduced borrowing costs, and receivable risk mitigation. A few banks have developed structures that use insurance the primary security and do not require the bank to take a charge of vendor’s accounts receivable with the buyer/importer. As a result, the financing can be extended to vendors all over the world, even if the bank has no presence in a particular market.
• Accounts Receivable Purchase Programs: By selling insured accounts receivable off the balance sheet to a bank, companies can improve return on assets, reduce days sales outstanding, and improve cash flow. These FASB compliant facilities are usually less expensive than traditional factoring products and allow the company to continue collecting directly from customers without third-party intervention.
• Asset-Based Financing: Credit Insurance allows banks to lend against foreign accounts receivable and potentially increase advance rates. Insurance can sometimes help financial institutions justify reduced costs on existing facilities, which can in turn justify the cost of insurance.
• Asset-Based Securitizations: Credit insurance can help displace accounts receivable concentrations to increase funding through ABS facilities. Insurance can also allow foreign or non-investment grade domestic accounts receivable to be added as eligible assets. Some insurers offer customized ABS policies with reduced conditionality and higher indemnity.