Buyer’s credit granted through the importer’s bank

The buyer's credit granted through the importer's bank ("Credit") is meant for financing purchases of Polish investment goods and services made in the frame of export contracts concluded by Polish exporters. The Credit is granted to a foreign bank ("Borrower") accepted by BGK, which, in turn, grants a direct credit to the importer (i.e. the buyer of the goods/services, "Importer"). The Credit is insured by the Korporacja Ubezpieczeń Kredytów Eksportowych S.A. (Export Credit Insurance Corporation, „KUKE")   

Key benefits for the Importer: 

• obtaining medium- and long-term financing of the purchase of  investment goods and services,
• more favorable pricing, in comparison with the costs of credit facilities offered to the importer by local banks,
• reduction of performance risk through the making of credit disbursements against presentation of documents accepted by the Importer,
• possibility of obtaining financing of the KUKE insurance premium,
• deferral of contractual payments. 

Basic terms:

• Repayment period - depends on the Importer's country and the industry - from 2 up to 12 years.
• The Credit may finance up to 85% of the value of the exported goods/services. Not less than 15% of the value of the exported goods/services must constitute the Importer's own share and should be paid to the exporter ("Exporter") in cash as an advance payment, before the commencement of the contract realization.
• The Credit is drawn after the partial or complete fulfillment of the contractual obligation by the Exporter. A draw-down is made to the exporter account, to the debit of the Credit account, against presentation by the exporter of commercial documents compliant with conditions of the export contract and the Credit agreement. The disbursement is effected within 5 banking days from the date of presentation of the documents in BGK.
• The Credit is repaid in equal installments and in equal periods of time, monthly, quarterly or semi-annually. The first installment is payable not later than in 6 months from the date of the fulfillment of the contract by the Exporter. 

Costs of the Credit:

• interest (payable by the Borrower, that is the Importer's bank) based on:
• fixed, during the whole period of financing, interest rate, that is the CIRR (Commercial Interest Reference Rate) rateor
• floating rate EURIBOR/LIBOR increased by the margin covering the liquidity risk of BGK
• administration fee - currently equal to 0,5 % per annum (payable by the Borrower),
• KUKE insurance premium - payable by the Borrower, calculated by KUKE individually for each Credit (payable by the Borrower)
• legal costs - cost of a legal opinion confirming the effectiveness of the concluded Credit agreement and/or the costs of providing and monitoring potential collaterals (covered by the Borrower).

The scheme of financing:

1. Conclusion of a commercial contract between the Exporter and the Importer.

2. Conclusion of an agreement between BGK and the Exporter („Agreement with the Exporter") which advises the Exporter of the terms of the utilization of the Credit, of the disbursement procedure and which defines the principles of cooperation during the period of disbursements the Credit and in the period of repayment of the Credit.

3. Conclusion of the Credit agreement between BGK and the Importer's bank (as the Borrower).

4. Conclusion of the relevant credit agreement between the Importer's bank and the Importer.

5. Provision of the insurance cover by KUKE (upon submission of an application by BGK).

6. Shipment of goods or performance of services by the Exporter, provided for in the export contract.

7. Submission, by the Exporter to BGK, of the commercial documents provided for in the „Agreement with the Exporter" and in the Credit agreement, confirming that the export has been effected.

8. BGK makes a disbursement of the Credit, making a direct payment to the Exporter and simultaneously debiting the Credit account with the amount of the disbursement. In turn, the Importer is debited with the disbursed amount, in the frame of the relevant credit agreement concluded between the Borrower (the Importer's bank) and the Importer.

9. The Borrower repays the Credit in installments, in accordance with the schedule prepared by BGK - the Importer repays the credit to the Importer's bank. Irrespective of that, the Borrower (the Importer's Bank) repays the Credit to BGK.  

How to obtain financing?

Contact: 
Foreign Trade Support Department
tel. (048 22) 5229 372,  (048 22) 5229 206
fax. (048 22) 5229 128
e-mail: dwhz@bgk.com.pl
Al. Jerozolimskie 7, 00-955 Warszawa