If the importer cannot or does not wish to offer an adequate bank guarantee, or when, despite bank coverage being available, the financing transaction via forfaiting is too onerous for the seller, it may be expedient to resort to SACE coverage by means of a transferable policy.

In short, the deferred payment (as a rule between 2 and 5 years) is covered up to 95% by means of SACE insurance coverage (a joint-stock company which is answerable to the Department of Foreign Trade). Coverage refers to both political and trade risks.

NB: in particular cases, especially for large transactions, full coverage may be provided.

MAIN ADVANTAGES

For the exporter:

• Protection against unfavourable future events and, if requested, also against the impossibility of honouring the contract due to causes not attributable to the same exporter;
• Financing of its credit – without recourse – with the Italian or international banking system, leaving considerable amounts outside normal bank credit facilities, thereby improving handling of corporate finances;
• Offer of a long payment extension to the (potential) buyer, as a valid opportunity to be exploited with respect to any competitors.

NB:An essential condition for the successful outcome of this type of transaction is that the foreign buyer is reliable, presenting satisfactory financial statements in relation to the value of the agreement in question, also demonstrating a satisfactory business reputation on the relevant market.