Trade credit glossary

Precise, plain-English definitions of the terms you will meet when applying for Sinosure-backed supplier credit.

Buyer code (Buyer ID): A buyer code is the identifier Sinosure assigns to an importing company in its buyer database. Exporters use it to request credit limits and declare shipments to that buyer.
Claim (credit insurance): A claim is the exporter's request to be paid by its credit insurer after an insured buyer fails to pay. After paying, the insurer normally pursues recovery of the debt from the buyer.
Country risk rating: A country risk rating is an export credit insurer's assessment of political and transfer risk in the buyer's country. It affects whether cover is available, the premium and the size of limits.
Credit limit (buyer limit): A credit limit is the maximum amount of a specific buyer's unpaid invoices that an exporter's credit insurance policy will cover at any one time. It revolves as invoices are paid.
Export credit agency (ECA): An export credit agency is a government-backed institution that insures or finances its country's exporters so they can sell abroad on credit. Examples include Sinosure (China), EDC (Canada), US EXIM and UK Export Finance.
Indemnity (percentage of cover): The indemnity percentage is the share of an insured loss the credit insurer pays the exporter after a valid claim; the exporter bears the remainder.
Letter of credit (L/C): A letter of credit is a bank's undertaking to pay the exporter when compliant shipping documents are presented. It shifts payment risk to the bank but uses the importer's bank credit line and incurs fees.
Limit utilisation: Utilisation is the share of an approved credit limit currently used by unpaid, insured invoices. High, consistent utilisation with on-time payment supports limit increases.
Negative buyer record: A negative buyer record is loss or payment-default history an export credit insurer holds on a buyer, which can reduce or block new credit limits with all insured exporters.
Net 90 terms: Net 90 means the full invoice amount is due 90 days after a defined date — for Chinese exports usually the bill of lading (shipment) date.
Open account: Open account is a payment arrangement in which the exporter ships goods and documents to the buyer before payment, and the buyer pays the invoice on an agreed later due date, such as 90 days after shipment.
Short-term export credit insurance: Short-term export credit insurance protects an exporter against a buyer's failure to pay invoices on credit terms of up to about one year, covering commercial risks (insolvency, default) and political risks.
Sinosure: Sinosure (China Export & Credit Insurance Corporation) is China's state-owned export credit agency, established in 2001, which insures Chinese exporters against non-payment by foreign buyers.
T/T (telegraphic transfer): T/T is a bank wire payment. In China trade, "30/70 T/T" means a 30% deposit at order and the 70% balance before shipment or against a copy of the bill of lading.
Tenor (credit period): Tenor is the length of the credit period granted to the buyer — for example 60, 90 or 120 days — between the reference date (usually shipment) and the payment due date.