ECA-backed finance (buyer and supplier credit)
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A government-backed agency guarantees a bank's loan, so an overseas buyer can pay for capital goods over several years and, under buyer credit, the exporter is paid as for a cash sale.
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01 · In plain words
A government agency backs the loan, so your buyer can pay over years and you are paid with buyer credit as for a cash sale
An , or ECA, is a government-backed body that supports its country's exports. UK Export Finance (UKEF) backs UK exports, and the , or EXIM, backs US exports. ECA-backed finance is credit for an export sale that an ECA supports. It comes in two main forms.
Buyer credit. In , a bank lends money to the overseas buyer. The buyer uses the loan to pay the exporter. The ECA guarantees the bank, which means the ECA promises to pay the bank if the buyer does not. UKEF's Buyer Credit Facility works this way for , services and intangibles (UKEF). EXIM's Loan Guarantee does the same for buyers of US capital goods and related services (US EXIM).
Supplier credit. In , the exporter itself gives the buyer time to pay. The buyer's promises to pay sit in or . A bank buys these papers from the exporter, and the ECA guarantees the amounts owed. UKEF offers this as its Bills and Notes Guarantee (UKEF).
Participants, including the European Union, in the OECD Arrangement on Officially Supported Export Credits follow shared rules. The Arrangement applies when the repayment term is two years or more (OECD Arrangement, Article 5).
Who is involved
- The exporter sells the goods. Under UKEF buyer credit, it is paid as though it had a cash contract (UKEF).
- The overseas buyer pays a share up front, then repays the loan over a number of years, at a fixed or floating interest rate (UKEF). A fixed rate stays the same. A floating rate moves with market rates.
- The lending bank makes the loan to the buyer, or buys the exporter's bills or notes.
- The ECA guarantees the bank. EXIM's Loan Guarantee covers 100 percent of and (US EXIM). EXIM can also lend directly.
- Sometimes other companies guarantee the buyer's repayment, as in the real case below.
02 · How it works
Six steps take a buyer credit from the signed contract to the last repayment
Figure 1 · Interactive
ECA-backed buyer credit, step by step
Read down the steps. The exporter is paid at step 5. The buyer repays from step 6.
Sources: UK Export Finance, Buyer Credit Facility; US EXIM, Loan Guarantee; OECD Arrangement, TAD/PG(2026)1, Articles 11 and 13.
03 · What it means for you
Under buyer credit, the exporter is paid as for a cash sale, and the buyer gets years to pay after a 15% down payment
Figure 2 · Interactive
What ECA-backed finance means for each side
Choose your side of the trade.
04 · Worked example
On a $10,000,000 export, the buyer pays $1,500,000.00 down and $1,168,750.00 in interest over five years
This example uses round, made-up numbers. The contract is worth $10,000,000. The buyer pays the 15% down payment, and a bank lends the other $8,500,000. The buyer repays over 5 years in 10 loan repayments of $850,000, plus interest, one every six months. Interest is 5.00% a year, worked out on what is still owed, on a 360-day year. The ECA's own fee is left out. Real rates and fees depend on the agency, the bank, the buyer and the deal.
Figure 3 · Illustrative
Repaying an $8,500,000 ECA-backed loan over 5 years
Illustrative inputs. The total interest is highlighted.
Made-up rates, worked out by our checking script. The 15% down payment and regular repayments of equal loan parts follow the OECD Arrangement, Articles 11 and 13. Your agency's and bank's terms will differ.
05 · When to use it
ECA-backed finance suits large capital goods exports where the buyer needs years to pay
Good fit when
- You sell capital goods or related services and the buyer needs years to pay (US EXIM; UKEF).
- The deal is large. UKEF buyer credit needs a UK export contract of at least GBP 5 million. UKEF's Bills and Notes Guarantee is typically relevant for GBP 1 million to GBP 30 million (UKEF Buyer Credit Facility; UKEF Bills and Notes Guarantee).
- The buyer can pay 15% of the contract value itself (OECD Arrangement, Article 11).
Another tool may suit better when
- You sell consumer goods. EXIM's Loan Guarantee covers capital goods and related services. Look at trade credit insurance.
- The buyer needs less than two years to pay. The OECD Arrangement applies from two years. Look at a usance letter of credit or forfaiting.
- You want EXIM support, but little of your export is made in the US. EXIM finances only the US content. Look at forfaiting of the buyer's bills of exchange or promissory notes.
06 · Rules and a real case
The OECD Arrangement sets the shared rules, and each agency adds its own terms
The OECD Arrangement on Officially Supported Export Credits gives a framework for the orderly use of officially supported export credits. Its current text is dated January 26, 2026 (OECD, TAD/PG(2026)1). The participants are Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye, the United Kingdom and the United States.
Its key rules are simple to state. The buyer pays at least 15% down (Article 11). The repayment term is no longer than the useful life of the goods, and 15 years at most (Article 12). Some power plants have a limit of 12 years. The loan amount is normally repaid in equal, regular installments, at least once a year (Article 13). A 2023 update, in force from July 2023, removed different limits by country and raised the standard maximum repayment term to up to 15 years (OECD, TAD/PG(2026)2).
Each agency then sets its own terms. The US ITA says medium-term export credit insurance gives 100 percent cover after a required minimum 15 percent down payment. usually covers large capital equipment up to five years (US ITA).
A real case. On August 18, 2025, EXIM published notice AP300022XX in the US Federal Register. It is an application for a long-term loan or financial guarantee of more than $100 million. It supports the export of US-made locomotives to Mexico. EXIM is the lender. The borrower is Grupo Mexico Transportes S.A.B. de C.V. GMXT US Inc. and Ferrosur S.A. de C.V. guarantee it. The locomotives are for freight rail within Mexico and between Mexico and other countries (Federal Register notice 2025-15659).
Summary
ECA-backed finance can make a large export work like a cash sale for the exporter and a long loan for the buyer
A government-backed export credit agency guarantees the bank. Under buyer credit, the bank lends to the buyer and pays the exporter. Under supplier credit, the bank buys the exporter's bills or notes. The buyer pays at least 15% down and repays the rest in regular installments over years. Check early that your export and your buyer meet the agency's terms.
Related guides: Financing industrial goods trade; Forfaiting; Buyer, country and performance risk. Related cards: Forfaiting; Trade credit insurance; Bill of exchange and promissory note. Every term is in the Trade Finance Glossary.
Sources
- OECD, Arrangement on Officially Supported Export Credits, TAD/PG(2026)1, January 26, 2026. Supports: purpose, participants, scope of two years or more, 15% down payment, 15-year maximum term, equal and regular repayments at least annually
- OECD, Evolution of the Arrangement on Officially Supported Export Credits, TAD/PG(2026)2, February 24, 2026. Supports: the 2023 update to repayment terms
- Export-Import Bank of the United States, Loan Guarantee, undated. Supports: capital goods and related services, 85 percent guarantee and 15 percent down payment, terms generally up to 10 years, 100 percent cover of commercial and political risks, US content only
- UK Export Finance via GOV.UK, Buyer Credit Facility, January 27, 2026. Supports: definition of buyer credit, 85% maximum loan, 15% paid to the exporter, GBP 5 million minimum, at least 2 years, exporter paid as under a cash contract, fixed or floating rates
- UK Export Finance via GOV.UK, Bills and Notes Guarantee, December 15, 2025. Supports: supplier credit through bills and notes, 15% to the supplier, typical contract size
- US International Trade Administration, Trade Finance Guide: A Quick Reference for US Exporters (2022 edition), July 2022. Supports: medium-term export credit insurance cover and term
- Export-Import Bank of the United States (Federal Register), Application for Final Commitment for a Long-Term Loan or Financial Guarantee in Excess of $100 Million: AP300022XX, August 18, 2025. Supports: the real case
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