Credit insurers covered USD 3,345 billion of short-term trade in 2025 and paid USD 11,107 million in claims
Trade credit insurance pays an exporter most of an unpaid invoice when a foreign buyer defaults or a political event stops payment. Short-term cover pays 90 to 95 percent, and the policy proceeds can be assigned to a lender to support financing.
Forfaiting buys an exporter's future payment claims outright, with no recourse to the exporter
Forfaiting is the without recourse purchase of future payment obligations, such as bills of exchange, promissory notes and letter of credit obligations. The advance is normally 100 percent of face value less finance charges.
Shipment splits trade finance in two: before it, lenders fund production; after it, they fund the invoice
Pre-shipment finance funds production and rests on the seller's performance; at shipment the security moves to the receivable, and post-shipment tools such as factoring and forfaiting fund the invoice.
Pre-export finance pays the exporter before the goods exist, and the buyer's payment repays it
Through pre-export financing, exporters are pre-paid for the products they are going to export. The lender advances against assigned export contracts, and the buyer normally acknowledges the assignment and pays the lender directly.
Factoring and invoice discounting fund the same invoices, but differ on who collects from the buyer
Both sell invoices to a finance provider at a discount. In factoring the provider usually runs the ledger and collects; in invoice discounting the seller keeps the ledger and the financing may be undisclosed to the buyer.
Receivables finance turns issued invoices into cash, a market FCI puts at EUR 4.04 trillion a year
Receivables finance lets a seller turn invoices it has already issued into cash before the buyer pays. The finance provider advances a share of the invoice, usually around 80% in factoring, and releases the balance less fees and discount when the buyer pays.