Supplier’s credit

What is a supplier’s credit?

A supplier’s credit is a loan that is issued within the scope of a supply contract. Plasser & Theurer is the exporter, and the customer is the importer. This loan is used to finance machines as well as after-sales projects. The supply contract and the loan agreement are not separate from one another. Instead, the payment terms are set forth in the supply contract. As a result, no commercial bank is involved. Rather, Plasser & Theurer also takes care of financing the project.

Risks in connection with the supply contract are covered by a guarantee issued by an Export Credit Agency (ECA) in the exporter’s country. The ECA in Austria is the Oesterreichische Kontrollbank AG (OeKB). This guarantee is a prerequisite for this type of financing.

Depending on the structure of the project (volume, repayment period, etc.) and the customer’s creditworthiness, additional securities may be necessary. Examples include the joint liability of an affiliated company or a bank guarantee.

Requirements

  • Volume
    ECA-covered supplier’s credits are subject to the OECD consensus and are regulated as a result.
    In accordance with the OECD consensus, up to 85 % of the contract value can be financed through a supplier’s credit, with a maximum volume of up to EUR 9 million. 
    Depending on the customer’s creditworthiness, an advance and/or interim payment may be optionally financed by a commercial bank, corporate risk with no ECA coverage.
  • Repayment period
    Depending on the customer’s creditworthiness and country risk classification, a repayment period from 3 to 5 years is standard.
  • Costs
    The most significant cost item in a loan agreement is the interest. Either a floating (EURIBOR-based) or a fixed interest rate is to be agreed on.
    The second cost item in connection with this financing solution is the ECA premium.

The actual terms of financing depend on the structure of the project and the creditworthiness of the parties to the agreement.

 

Your benefits

  • One-stop shop: both your machines and your financing come from one source, i.e. directly from Plasser & Theurer
  • Financing solutions with attractive interest rates: they are either floating EURIBOR-based rates or fixed interest rates
  • It isn’t necessary to involve commercial banks, which simplifies the process
  • You can pay for your Plasser & Theurer products at a later date to improve your liquidity as the importer
  • Our seasoned specialists provide support and guidance during the entire financing process