EDC insurance product allows small Canadian companies to insure their foreign sales

OTTAWA, Ont.–Export Development Canada (EDC) has introduced a new online version of its credit insurance product that will allow Canadian companies to insure their sales to US or foreign buyers in minutes.

Credit insurance allows small businesses to insure their sales to foreign buyers to protect them against the risk of not being paid.

“Canadian companies can now apply, receive a quote, accept and pay for their credit insurance, and do it all online” said Clive Witter, Senior Vice-President of Insurance, EDC. “Being mindful of the limited time that small business owners have in their busy lives, we designed an automated process that in most cases can be measured in minutes from start to finish, not hours or days.”

Trade Protect is designed specifically for small businesses, covering sales to foreign buyers up to a value of CAD 350K. Canadian companies can choose to cover sales for payment terms of 90 or 180 days.

“What Trade Protect does is allow a small business that is selling outside of Canada to pre-arrange insurance on a potential buyer when a sales opportunity comes up,” added Witter. “Trade Protect allows the Canadian company to sell to them with confidence even if the US or foreign buyer is unknown to them, and to do it in real time, 24 hours a day, seven days a week.”

Trade Protect may also help their bank provide additional financing to the company because the payment is protected.

The product can also allow the Canadian seller to be more competitive by offering more flexible payment terms than their competitors, which can often be an advantage in many industries.

In the case where the payment is not received by the foreign buyer, EDC will pay the Canadian exporter 90 per cent of the invoice value and then seek payment directly from the foreign buyer. If EDC recovers the payment, it pays out the final 10 per cent back to the Canadian company.