Finance today. Buy tomorrow. Shopping lines facilitate sourcing from Europe.

Unlike traditional export finance, shopping lines can be established before a specific supply contract has been signed. They provide an ECA-covered financing framework at an early stage for international importers’ future procurement. At the same time, they can open up new business opportunities for European exporters.

 AKA structures these financing solutions, bringing together international customers, European exporters, banks and export credit agencies (ECAs). 

 A traditional ECA-covered buyer’s credit is generally based on a specific export contract. A shopping line takes a different approach: the starting point is an international importer with a medium- or long-term investment and procurement programme. 

An ECA-covered credit facility is established for the importer, under which eligible supply contracts with exporters can subsequently be financed. Instead of arranging a separate financing structure for each individual procurement, multiple suppliers and supply contracts can be flexibly bundled within a single financing structure. 

The suppliers and deliveries to be included do not need to be definitively specified at the outset. The details can be determined as the procurement programme progresses. A prerequisite for financing is that the respective deliveries meet the criteria of the ECA involved. 

What are the benefits for the importer?

For international importers, a shopping line provides financing certainty for planned investments and procurement activities at an early stage – even before individual supply contracts have been finalised. At the same time, they retain flexibility in their procurement decisions, as suppliers can be selected over the course of the procurement programme and funds can be drawn down under the credit facility as required. Multiple procurements and supply contracts can be bundled under a single financing framework. The process also remains streamlined: suppliers do not need to be involved in the financing documentation. 

What are the benefits for European exporters?

For European exporters, shopping lines can facilitate access to international customers. A substantial part of the financing is already in place before the specific supply contract is signed.

If an exporter is selected as a supplier and the delivery meets the requirements of the export credit agency involved, the supply contract can be financed under the existing credit facility. This means that exporters do not have to set up an entirely new long-term financing solution with customers for each transaction, nor do they have to apply for their own ECA cover.

This can also create new sales opportunities for smaller exporters, as individual supply contracts do not necessarily need to reach the volumes typically associated with long-term export financing. Procurement from multiple companies can be bundled within the same facility. In addition to machinery and equipment manufacturers, appropriately structured short-term shopping lines can also benefit component manufacturers, suppliers and producers of regularly procured goods.

Which ECAs offer shopping lines?

Germany’s export credit agency Euler Hermes offers coverage for shopping line structures. This provides foreign buyers with an additional incentive to develop their business relationships with German exporters or expand their supplier base in Germany.

Other European ECAs also offer comparable instruments or are developing existing solutions further. These include Austria’s OeKB and Italy’s SACE, for example. However, the specific structure can differ significantly – particularly in terms of the scope of cover, eligible deliveries, drawdown mechanics and repayment profiles. 

Shopping line financing with AKA

As a specialist bank for international export and trade finance, AKA draws on experience dating back to 1952, combining expertise in structuring ECA-covered financing with an international client network and close relationships with European export credit agencies.

We consider not only our clients‘ current financing requirements, but also their planned investments and procurement for the coming years: What investments are planned? Which procurement activities are eligible for ECA cover in principle? Which products and technologies could be sourced from European markets? And which ECA and which financing structure are best suited to the respective requirements?

Based on this information, we develop and structure a shopping line tailored to the respective procurement programme. Depending on the transaction, this may include:

• analysing the planned investment and procurement programme, 
• identifying suitable European ECAs and supporting the application process,
• coordinating the credit structure, drawdown mechanics and ECA requirements,
• implementing the financing documentation, and
• supporting subsequent drawdowns under the credit facility. 

AKA acts as the link between international importers, European exporters, banks and ECAs. The aim is to identify potential export transactions at an early stage and put the financing structure in place today for tomorrow’s procurement.