Approval Process

This section provides a step-by-step guide through an New Zealand Export Credit Office (NZECO) guarantee process.

1. The exporter makes an enquiry to NZECO

We recommend that an exporter contacts the NZECO as soon as a potential deal is anticipated, and provides as much of the information available on the deal and buyer as possible. 

The NZECO team will perform an initial risk analysis, free of charge.

2. Indicative offer from NZECO

The exporter may then receive an indicative offer from the NZECO, which outlines the potential export credit structure, tenor and terms.  A formal letter of support can also be drafted by the NZECO for the exporter to present to their international buyer.

In the event that the initial risk analysis shows that the risk is too high, or that the transaction falls beyond the criteria and guidelines of the NZECO products, the NZECO staff may still be able to suggest ideas about how to reduce the risks associated with the transaction, or how to comply with the NZECO’s criteria.

3. The exporter performs background preparation for export credit transaction

The exporter will have already initiated discussion with their bank or financier, and now will take steps to confirm financing arrangements.

The exporter will need to gather financial details of their buyer or guarantor, including recent annual accounts (audited by a recognised auditor), cash flow forecasts, an independent credit report and information about the buyer’s market.

4. The exporter submits an application form

The exporter submits the NZECO application form and pays an application fee, which is the cost of processing the application further (see How We Price for further information).

The NZECO and its Agent will then undertake a more detailed credit assessment of the risks before finalising the finance offer.  The length of this process is dependent on the level of information provided, size of the deal and degree of risk.  It can take as little as two weeks or possibly months for large project finance or direct corporate risk deals.

In the case of complex projects, or projects which are large compared to the size of the exporting company, the exporting company itself will be evaluated.  For example, is the exporter likely to, and does it have the ability to complete the contract and what is the extent of its experience and expertise?

5. Finance terms finalised and supply contract signed

The NZECO premium is payable in full prior to the term of the NZECO’s cover commencing (see How We Price).

This means that for pre-credit cover, the NZECO’s premium must be paid once the terms of the finance offer have been finalised and the export supply contract is signed.

For post-shipment cover, the NZECO premium is payable on shipment.  In the event the exporter wishes to receive disbursements during production (as outlined in the supply contract) or the exporter is selling the “repayments” to the bank prior to shipping, then the premium is payable on the supply contract signing.