Credit insurance for exporters: A beginner’s guide

Selling internationally can help Canadian businesses grow, but it also changes how and when you get paid.

Longer payment terms, new buyers and unfamiliar markets can increase the risk of late, or missed, payments. For a growing company, even one unpaid international invoice can put pressure on cash flow and slow your growth plans.

That’s where trade credit insurance comes in.

This guide explains what trade credit insurance is, why it matters when you export and how Export Development Canada (EDC) supports exporters on their international journey.

When you sell internationally, how and when you get paid often changes.

Compared to domestic sales, exporters may face:

• Longer payment terms such as 30, 60 or 90 days, each with different risks and advantages;
• new buyers with limited payment history;
• greater distance, different legal systems and unfamiliar business practices; and
• political or economic events, including shifts in trade conditions, that can disrupt payment.

Credit insurance protects your business if an international customer doesn’t pay what they owe you.

It helps cover losses caused by buyer insolvency, prolonged late payments, or certain political and economic disruptions. Rather than replacing good credit practices, credit insurance helps exporters manage risk, so a missed payment doesn’t derail growth plans.

For businesses new to exporting, it’s often one of the first tools they consider once international sales start to grow.

Export payment risk often increases when you:

• Enter a new market;
• sell to a new or unfamiliar buyer; and
• offer more flexible payment terms to stay competitive.

Even if you’re an experienced exporter, it can be harder to assess buyer risk across borders. Differences in financial reporting, regulations, or market conditions can make it more difficult to predict how, and when, you’ll be paid.

What are open account terms?

Open account terms are an agreement that allows the customer to pay after receiving goods. The credit period can be short, like payment upon receipt, but often means waiting 30 to 90 days—or more—to get paid. While common in international trade, these terms increase the risk of delayed or missed payments.

When payments are delayed, or don’t arrive as expected, recovering funds across borders can take time and effort. That’s why many exporters focus on managing payment risk early.

Credit insurance helps reduce that uncertainty by protecting your international receivables—the money your customers owe you.

For small and mid‑market exporters, credit insurance can support growth in several practical ways:

• Protects cash flow: If a buyer doesn’t pay, insurance can help limit the financial impact.
• Supports confidence: Exporters can pursue new buyers or markets with less hesitation.
• Enables competitive terms: Offering open account terms may be easier when payment risk is managed.
• Strengthens financing discussions: Lenders often view insured receivables as lower risk.

These benefits can be especially valuable early in your export journey, when margins are tighter and cash flow matters most.

When Canadian businesses start selling internationally, they often have questions about risk, financing and unfamiliar markets.

EDC helps exporters navigate international trade by offering tools and support designed for different stages of export growth. This includes:

• Insurance solutions, including trade credit insurance, to help manage non-payment risk
• Financing support, often delivered in partnership with Canadian financial institutions
• Global market and buyer insights to help exporters better understand unfamiliar markets

Exporters typically draw on different types of support when selling internationally and growing their business. Credit insurance is one of the first forms of support they explore as international sales begin to grow.

Discover how Storkcraft used EDC’s credit insurance to grow their business in Mexico.

EDC trade credit insurance: A practical starting point

EDC’s trade credit insurance helps protect you if your international buyer doesn’t pay. Our credit insurance solutions are designed to support businesses at different stages of export growth—from occasional exporters to those managing higher volumes of international sales.

Coverage can help exporters:

• Take on new buyers
• Enter unfamiliar markets
• Protect working capital as export sales grow

We work with you to understand your needs and help you assess buyers and markets before coverage is put in place.

Exporters don’t all face the same risks. EDC offers two credit insurance options, depending on how often you export and to how many buyers you sell.

Both options protect against non‑payment. The right choice depends on your export activity now and how you expect it to grow.

Not sure which one is right for you? Check out our Help me choose tool to get a recommendation on which could best meet your needs.

Many exporters begin exploring credit insurance when:

• International sales start to grow
• Payment terms extend beyond immediate payment
• New buyers or markets represent a larger share of revenue
• A single missed payment would have a big impact on your business

Thinking about payment risk early can help prevent disruptions later, especially as export opportunities become larger or more complex. It’s also easier to put in place when it’s considered before a larger deal, rather than in response to a missed payment.

Managing payment risk is closely tied to cash flow planning, especially as international sales grow. If you’re interested in expanding your exporting knowledge alongside risk-management tools, the Forum for International Trade Training (FITT) offers a practical overview of cash flow management for international trade.

Next steps for protecting against non-payment

Understanding how credit insurance works is an important part of managing risk as you start or expand your export activities.

If you’d like to learn more about how credit insurance can support your business, visit EDC’s credit insurance solutions page. You’ll find an overview of coverage options, along with practical resources, including our guide on protecting global sales from credit risk.

You can also explore our global economic insights and financial analysis to stay informed about potential risks in international markets.