Shopping line cover
Easily consolidate your procurement in Germany as an importer –
Secure exports from various suppliers as a bank
Shopping line cover – access to international procurement programmes
As a bank, do you wish to secure loan receivables arising from the financing of export transactions for numerous German exporters—even when the exact scope of delivery has not yet been finalized? This is possible with our shopping line cover, a type of buyer credit cover designed to secure credit lines. With this form of cover, the bank secures the claim for repayment of a credit line as agreed in the credit agreement with the foreign borrower.
Shopping line cover creates incentives for importers abroad to expand their supply base in Germany. This makes it easier for German industrial companies – and, above all, small and medium-sized enterprises – to gain access to international procurement programmes and major projects. Such financing is offered worldwide to importers with a good credit rating. The removal of verification requirements, simplified disbursement conditions, flexible repayment profiles and other improvements thus create an attractive competitive environment for German companies.
Good to know: You can find out whether this cover is generally suitable for your specific transaction by outlining your general plans to us – in particular, by specifying your past and planned future imports from Germany.
Benefits of shopping line cover
importers, banks and German exporters (particularly SMEs) to
operate successfully on a global scale.
For banks
The shopping line cover provides support for the implementation of international projects whilst helping to minimise risks. Flexibility in terms of volume and repayment profiles, combined with streamlined processes, creates genuine added value for customers.
Covering credit lines as a financing institution
Shopping line cover is designed to give the German export sector access to the procurement programmes of large, creditworthy foreign customers. To this end, banks have the option of covering a corresponding reducing credit line. To utilise this facility, transactions from various German exporters are bundled into one or more tranches. The corresponding loan receivables are guaranteed by the Federal Government.
Good to know: For these transaction structures, shopping line cover provides buyer credit cover that is subject to specific conditions.
For importers abroad
Access to high-quality German products is made easier, thereby strengthening supply chains. Improved financing programmes offer the necessary flexibility and security to optimise procurement strategies. With the right support, business relationships with German suppliers can be expanded and their innovative strength harnessed.
This also opens up further opportunities for German exporters to place their products worldwide and strengthen supplier relationships. Access to international procurement programmes and major projects tailored to specific needs helps to boost competitiveness in the global market. Simplified financing options help to make the most of international business opportunities.
An overview of shopping line cover
For banks
For importers abroad
Advantages of shopping line cover
The package of measures considerably simplifies shopping line cover and makes it more open. This will enable German exporters, especially SMEs, to strengthen their position in international competition.
- Support for German exporters: Easier access to international procurement programmes and major projects.
- Flexibility for importers: Shopping line cover is now available to importers with a good credit rating, without rigid buyer category requirements.
- Flexibility with credit lines: Credit lines can be utilised without prior approval for each specific export transaction and without time-consuming proof of origin, provided that shopping line cover has been granted.
- Plausibility checks instead of verification requirements: Purchases made by the importer in Germany are checked for plausibility before cover is granted.
- Better conditions: Companies benefit from early drawdown options, simplified disbursement requirements and a more risk-orientated due date for payment.
Apply for shopping line cover
You can easily apply for this product online via the myAGA customer portal. Please submit your digital application there to apply for shopping line cover for your export business. To do this, simply register once – it’s quick and easy, taking just a few steps – on our myAGA customer portal. If you are already a myAGA user, you can log in directly using your login details.
If you need help with the application process or have any questions about which product is right for you, please feel free to contact our business advisers.
Downloads and Brochures
FAQ – shopping line cover
What additional cover options are available?
Shopping line cover can be supplemented, if required, by
- Securitisation guarantee (for the refinancing of export loans – improved terms for the benefit of the refinancer)
- Covered bond guarantee (for mortgage bond banks to refinance their own mortgage bond business – covering against the risk of receivables being withdrawn, for the benefit of mortgage bond holders)
- Securitisation guarantee under the KfW refinancing programme (enables participation in the KfW programme, through which liquidity can be provided by refinancing claims backed by the federal government) – currently in the pilot phase – please feel free to contact us regarding specific transactions.
- Exporters are free to apply for their own guarantees (e.g. manufacturing risk guarantees) in favour of a bank, outside the scope of the shopping line cover.
What are the key differences compared with traditional buyer credit cover?
With regard to shopping line cover, banks can draw on their experience with the Federal Government’s tied buyer credit cover (FKG). However, compared to that, numerous improvements have been implemented, particularly to facilitate the handling process. To this end, the General Terms and Conditions (FKG) are amended by specific terms and conditions.
By providing shopping line cover, the Federal Government guarantees claims arising from a drawdown credit facility granted by the bank to a foreign customer. This foreign customer can then place procurement orders with various German exporters. All parties involved benefit from simplified administrative procedures. The advantage for the bank lies in particular in the fact that, for example, only one set of credit documentation is required.
The assessment of ESHR issues follows international guidelines, in particular those of the OECD. This simplifies the process, as certain assessment elements are carried out at the level of the companies and the management systems they have implemented.
How can the cover be used by the bank providing cover for refinancing?
The claims arising from the shopping line cover can be assigned - together with the loan claim - to other banks. It is also possible to use the shopping line cover for refinancing in your own Pfandbrief business by means of additional covered bond guarantee. Furthermore, a securitisation guarantee can be used to improve the conditions of shopping line cover in favour of the refinancing assignee so that the bank can refinance at a lower interest rate.
Do you have any further questions about shopping line cover?
Our customer consultants are happy to answer any questions you may have about shopping line cover and, if you wish, will guide you step by step through the application process.
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