The contract
includes three components, all necessary for the efficient management
of risk and the issuing of credit:
A.
The potential customer's corporate credit report and background references.
B.
An analysis of the financial statements and a credit recommendation (open
account format).
C.
Local guarantees pledged by potential customers in order to cover possible
defaults during the sales term. These guarantees are structured by our
in-country attorneys, ensuring that they are in accordance with local jurisdiction
requirements, and that they are enforceable in the local legal system.
The significance of local guarantees is "ease of enforcement" in
the event the customer fails to pay outstanding debts for products or services.
The credit contract enhances the value of the client's receivables. This
applies where the client intends to use the receivables to secure asset-based
financing, enters a factoring arrangement or seeks to protect the receivables
through credit insurance. In the latter case, the credit contract will
satisfy the stringent requirements of the insurance company by ensuring
that the client remains in compliance with stipulated policies and can
recover the full value of the claim.
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