Types of export financing

Winning an order often depends on the exporter’s ability to finance the importer, especially for exports to emerging markets. You can choose from several financing options: documentary credit with deferred financing, documentary credit with bank-to-bank financing, bill of exchange or buyer credit.

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Holmens Kanal 2-12
DK-1092 Copenhagen K
Tel.: +45 33 44 00 00
Fax: +45 45 14 98 95

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A documentary credit enables an exporter to offer the importer deferred payment. The exporter and importer must negotiate the terms and conditions of the documentary credit, including the expenses that the importer will bear.

The exporter and importer must agree on the following:

The rate of interest that the importer will pay on the deferred payment
The length of the credit period and the payment dates

The Bank’s role
The importer’s bank issues the documentary credit at the request of the importer. The Bank makes a financial commitment to the exporter and accepts the documentary credit issued by an acceptable bank. A guarantee from an export credit agency may also be required.

Expenses
Documentary credits entail the following expenses:

Margin, management and commitment fees
Documentary credit charges
Guarantee premium to an export credit agency, if applicable

Exporters should be aware that they bear an interest rate risk from when the contract is signed with the importer until the Bank finances the documentary credit. Exporters can also arrange with the Bank to cover this interest rate risk.

Learn more

Go local Read about our trade and export finance services across northern Europe (new window):	Download fact sheets Read more about our trade finance products and services in these booklets (PDF): Documentary credits Guarantees Collections To read PDF documents, download Adobe Reader®