Export credit pricing and disbursement

• The Finnvera Group orders the necessary credit reports and invoices those from the exporter while determining whether it will grant the credit.
• The exporter applies for credit on behalf of the buyer and at the same time provides information on the export transaction. If the credit is approved, the exporter will be charged a processing fee of EUR 500–5,000. The amount depends on the size of the credit. 

• The borrower's costs include interest, arrangement fee and credit reserve fee:
  • The interest rate can be variable or fixed and it includes a margin, which is defined on a case-by-case basis, taking into account the OECD export credit agreement regarding Finnvera.
  • The arrangement fee is typically paid when the loan is signed.
  •  The commitment fee is calculated from the moment the credit is signed to the end of the availability period for the utilised part of the credit.
• The borrower also pays all other costs incurred in arranging the credit, such as the fees of the law firm and any costs related to the social and environmental impact study.

• The interest rate on the credit can be fixed or floating.
  • Floating rate is either Euribor (EUR) or CME Term SOFR (USD)
  • The fixed rate is based on the OECD CIRR reference rate for that currency (EUR, USD or, on a case-by-case basis, the borrower’s or buyer’s country’s currency). The CIRR rate is primarily locked when the credit agreement is signed (excluding ship financing). In ship financing, the interest rate shall be locked at the time of conclusion of the export contract for a maximum of six months at a time. The necessary margins to cover the costs of arranging and administrating the credit and managing the credit risk shall be added to the CIRR rate. The prevailing CIRR rates can be found on the OECD website.

The margins are based on the applicable minimum levels of the OECD Arrangement as well as on the credit risk, administrative costs and funding costs. The final margin can only be locked at the time of signing the credit agreement, as components of the margin depend on the prevailing market situation.

• The credit can only be disbursed after:
  •  The borrower has provided all the documents required by the credit agreement and
  •  Finnvera has confirmed to the borrower that disbursement can be made.
     
• The documents required from the borrower (and possible guarantor and pledger) include, for example:
  • an extract from the Trade Register
  • the Articles of Association or similar
  • a decision by the Board of Directors or similar on
    •  the borrowing
    • Authorised signatories and signature samples of the authorised persons to signs the credit
  •  the documents needed for knowing the customer (KYC)
• A legal opinion issued by the lender’s local law firm, confirming for example, that the credit agreement is binding and enforceable against the borrower.
   
• Further, the condition for disbursement of the credit is always that the borrower complies with the terms of the credit agreement. If the terms are breached, the credit cannot be utilised.

The exporter must provide a certified copy of the delivery contract and a clarification that the cash payment (advance payment) in accordance with the OECD Arrangement has been made. In addition, in connection with each disbursement, the exporter must provide confirmation that in connection with the export contract the exporter has a receivable that corresponds to the credit amount to be disbursed, or that the exporter has previously received a similar payment. The exporter must also provide an account number to which the funds can be paid.

• The advance payment (at least 15 per cent of the value of the goods and services imported from Finland and third countries related to Finnish export trade) must be paid to the exporter before the credit is disbursed.
• Usually, the exporter receives payment for rest of the export contract (max 85%) upon delivery when the buyer disburses credit. See section related to the conditions for disbursing a credit

It is entirely up to the borrower to make a disbursement request. If the borrower does not send a disbursement request in accordance with the credit agreement, the credit will not be disbursed, and the funds will not be paid to the exporter.

Yes. However, especially for low-value export transactions, only one credit disbursement is recommended, so that the credit documentation can be kept as light as possible.

Yes, if Finnvera considers that the terms of the credit agreement have not been complied with.