Financing of German exports and supplier loan
Our biogas equipment is made in Germany. The Federal Republic of Germany supports exports through guarantees for German exporters and financing banks.
There are two types of insurance coverage:
- Supplier credit cover,
- Buyer credit cover.
With supplier credit cover, we deliver the equipment paid by installments (supplier loan). You are required to make a down payment of 15% of the contract amount and the remaining 85% can be paid by installments, at least in half-year installments over a period of 3-5 years. Thus, the delivery is insured. In order to get such insurance, you must participate in this process and provide us with the necessary documents.
With buyer credit cover, a German bank (as well as certain foreign banks and all foreign branches of German banks) or a bank in your home country will provide you with a loan to make the payment for the biogas equipment effectively upon delivery. If a bank is involved in the process, loan terms can be up to 10-15 years. Banks often only provide loans if there is an adequate state cover for the export credit. Therefore, the provision of insurance coverage can be critical to making the deal happen.
In both cases, the contract and the credit rating check are prerequisite for the loan. Your credit rating plays a crucial role in this. The main focus of this credit rating check is on your balance sheet, your assets, your financial situation and your profits for the past three years.
HOW DOES THIS WORK?
The Federal Republic of Germany has mandated Euler Hermes to manage the export credit guarantee scheme – also known as Hermes Cover. As a state-commissioned company, Euler Hermes processes an application from us as an exporter or from your financing bank in order to decide whether an export credit guarantee can be issued. This means that we and you should get in touch with Euler Hermes as early as possible - i.e. while negotiations are still going on and in any case before signing the export contract, and provide Euler Hermes with documents for approval of the delivery. The application review takes an average of 1.5 months. Forms and applications will be processed by our company Zorg Biogas.
IS IT POSSIBLE TO INVOLVE LOCAL CONTRACTORS IN SUCH PROJECTS?
Biogas plant is not just equipment, but also construction and installation works. Goods and services from your home country (outside Germany) are referred to as local expences. They can be included in Hermes cover together with export goods from Germany, but may not exceed 23% of the total project costs.