Entering the global market can be a risky step even for the strongest Estonian companies. The quality of products or services alone is not enough – you also need confidence that the financial side of the transactions will not fail. That is why KredEx, in cooperation with the Entrepreneurship and Innovation Foundation (EIS), has created credit insurance and export loan tools that help Estonian entrepreneurs take bolder steps in international markets.

“If an entrepreneur is assured that the money will arrive, he can compete and grow more confidently even in markets where the risks are high,” says Katrin Savi, member of the board of KredEx Credit Insurance.

Risks are real – even for the best products

According to Katrin Savi, the buying and selling process in international business is not limited only to the quality of the product or service. Equally important are the terms of the contract, including long payment terms and financing options, which buyers often expect. In larger transactions, the buyer may want to pay over three, five or even ten years.

“If the buyer wants to pay over several years, the Estonian entrepreneur finds himself in a difficult situation. The risks are high – payments may be delayed or not received at all, but no exporter wants to cancel the order,” explained Savi on Äripäev Raadio.

Solution: credit insurance + export loan

To mitigate these risks, KredEx, together with EIS, has created a two-part solution: credit insurance for long-term export transactions and export loan. They work hand in hand to ensure both the seller's financial security and attractive terms for the buyer.

• Credit insurance covers a large part of the risks in the event that the buyer fails to meet its payment obligations – whether due to economic or political reasons.
• Export loan allows the company to receive the majority of the sales proceeds immediately, although the buyer pays later according to an agreed payment schedule.

This combination helps to strengthen the company's cash flow and reduce the financial burden - especially in the case of long-term and large-scale export projects.

“The solution is suitable for sellers of capital and durable goods, as well as for large-scale service providers,” added Savi.

Real-world experiences: how does the solution work in practice?

Several Estonian companies have already used the solutions created in cooperation between KredEx and EIS. Their experiences confirm that this is more than just an insurance product - it is a strategic tool for achieving growth.

Kristjan Lind, the manager of Bikeep OÜ, admitted that without KredEx's support, some international orders would not have been accepted.

“This gave us the opportunity to compete on a completely new level and expand into the New Zealand market.”

Hekotek AS Board Member Tõnis Haldna spoke about a multi-year project in Finland, where covering the payment risk of KredEx was key.

“Our projects last for years – therefore it is important that the payment risk is covered throughout the entire period,” he emphasized.

European practice: state support for exports

Similar credit insurance and export loan systems are also successfully used by other countries. Germany’s Euler Hermes offers a state guarantee that allows exporters to reduce risks and offer buyers more favorable terms. France’s Bpifrance notes that buyer credit insurance allows the buyer to be offered a longer payment term and a more favorable loan, while the exporter receives his money immediately.

Short-term credit insurance – for everyday exports

Not all transactions are multi-year projects. That is why KredEx also offers short-term credit insurance, which is suitable for insuring sales transactions with a payment term of 30–90 days.

“The flexibility of the service allows the company to insure both the entire sales turnover and individual transactions, depending on the need,” confirmed Savi.

Baltliner OÜ CFO Natalja Valdmann pointed out that even one unpaid invoice can have a strong impact on the company’s liquidity:

“For us, every unpaid invoice can have a very painful impact on liquidity. Credit insurance has helped to keep cash flow stable and offer customers flexible terms.”

“Sales are very good, but money is even better – when you get it back,” she added.

More than protection: an opportunity for growth

According to Katrin Savi, the value of credit insurance is much broader than just risk mitigation. This helps companies move from home to export markets, increase sales capacity and even get better financing terms from banks, for example through factoring.

“If we recall European statistics from a few years ago, credit insurance helps increase exports by up to 30 percent. This is significant,” added Savi.

Estonia's lagging behind and growth potential

According to the 2022 data of the European Systemic Risk Board:

• In Western Europe, up to 15% of total corporate turnover is insured
• And up to 60% of export turnover on credit terms

Credit insurance is not yet that widespread in Estonia. KredExi hin