Solutions for Banks
Help Your Customers Solve Receivable and International Financing Challenges
J. Maxime Roy, Inc. works with banks and their customers to address domestic and foreign receivables, customer concentrations, credit risk and international financing opportunities.
Talk With JMR About a ClientWhen Should You Call JMR?
You may want to involve JMR when one of your customers has:
Borrowing Base Limitations
Receivables are excluded or limited due to customer concentrations, foreign receivables or credit risk.
Customer Concentrations
A large customer concentration is restricting borrowing availability.
Receivable Credit Risk
You would be more comfortable lending against certain receivables if the risk of customer nonpayment were insured.
Additional Borrowing Capacity
A customer needs additional working capital and insured receivables might support a higher advance rate or allow more receivables into the borrowing base.
Foreign Accounts Receivable
Your customer has foreign receivables that you would have to exclude from the borrowing base.
Domestic Accounts Receivable
Help Your Customer Borrow More Against Its Receivables
Trade credit insurance can help address customer concentrations and receivable credit risk in domestic receivables, potentially supporting a higher advance rate and expanded borrowing availability.
How It Can Help
- Support higher advance rates on eligible receivables
- Allow borrowing-base credit for some or all of an otherwise excessive customer concentration
- Include additional eligible receivables
- Reduce your lending risk on customer nonpayment
- Potentially improve loan terms for a qualified borrower
Example: Customer Concentration
A borrower has $10 million of otherwise eligible receivables. Its largest customer represents $3 million, or 30%, while your bank's concentration limit is 20%.
If your bank accepts trade credit insurance on that customer and gives borrowing-base credit for the excess concentration, an 80% advance rate could provide:
$800,000
of additional borrowing availability.
Foreign Accounts Receivable
Turn Previously Excluded or Limited Receivables Into Potential Borrowing- Base Collateral
Many banks exclude or substantially limit foreign accounts receivable from the borrowing base due to the credit and political risk associated with foreign buyers.
How It Can Help
- Allow inclusion of insured foreign receivables in the borrowing base
- Reduce or eliminate country risk concerns
- Provide independent insurer underwriting and monitoring of foreign buyers
- Potentially support a higher advance rate
- Improve overall borrowing availability
Example: Foreign Receivables
A borrower has $5 million of foreign accounts receivable that your bank currently excludes from the borrowing base.
If the receivables are insured and meet your requirements, these receivables may be included in the borrowing base, potentially providing up to:
$4,000,000
of potential borrowing availability.
Foreign Buyer Financing
Help Your Customer Complete an International Sale
A customer may come to you because a foreign buyer wants to purchase its U.S.-made equipment or products but needs financing. Rather than losing the sale, this can be an opportunity for your bank to support your customer.
How It Can Help
- Provide information on buyer financing options
- Work with the exporter, foreign buyer and lender
- Explore EXIM's Loan Guarantee or credit insurance on the bank's loan, or private-market insurance when necessary
- Help structure financing with no recourse to your customer as the exporter
- Support medium-term financing for capital equipment and other eligible U.S. goods and services
Questions to Consider About Your Clients
- Which of your clients have foreign receivables that are excluded or limited in their borrowing base?
- Are customer concentrations restricting borrowing availability for any of your clients?
- Would a higher advance rate be appropriate on insured receivables for qualified clients?
- Could insured receivables allow you to support additional financing for a good customer?
How JMR Works With You and Your Customer
Understand Your Objectives
We learn your credit, collateral and portfolio requirements.
Review Your Customer's Receivables
We analyze the customer base, countries, credit terms and specific borrowing-base limitations.
Identify Appropriate Insurance Markets
We evaluate private-market insurers and, for eligible exporters, EXIM where appropriate.
Structure Coverage Around Your Requirements
We work to obtain buyer credit limits and policy terms that address the credit concerns you have identified.
Coordinate the Documentation
We work with your customer and the insurer, including assignment of policy proceeds arrangements when required.
Provide Ongoing Support
JMR assists with policy administration, buyer credit limits and issues that arise during the policy period.
Have a Customer With a Receivable or International Financing Challenge?
Before excluding the receivables, limiting the borrowing base or turning down an international financing opportunity, talk with JMR. There may be another way to structure the transaction.