How does Sinosure credit insurance work?

by Axton Global
Sinosure is a national export credit insurance in China. It protects Chinese suppliers against non-payment by foreign importers, enabling them to sign supply contracts with deferred payment terms.

Important considerations about Sinosure workflow

Important: This is the supplier who offers payment deferment to the importer at their own expense. Meanwhile, Sinosure insures the trade credit extended to the importer as well as the associated credit risks of the supplier. Sinosure doesn’t pay money to the supplier.

In fact, many Chinese manufacturers and trading companies have enough capital to offer payment deferment to importers like you. Moreover, it is beneficial for them. By providing payment deferment, Chinese suppliers encourage you to collaborate with them on long-term terms. This ensures a steady flow of orders from you and keeps their production capacity busy.

Sinosure guarantees the supplier that in the event you are unable to settle with them due to financial insolvency or external political and commercial factors, the supplier will receive insurance compensation and won’t suffer losses.

Even if a supplier lacks sufficient working capital to manufacture and fulfill your order without payment, they can still address this issue with Sinosure. All major banks and credit organizations in China collaborate with Sinosure insurance and can provide export credits to the supplier under Sinosure insurance coverage.

Parties involved in Sinosure-backed trade operations

Seller (Exporter)
The Chinese manufacturer selling goods to international buyers.

Insurance company (Sinosure)
The intermediary providing insurance coverage for the transaction.

Buyer (Importer)
The foreign company purchasing goods from Chinese suppliers.

Key steps in Sinosure-backed trade operations

1. Sinosure credit investigation for importers
The importer undergoes a credit investigation procedure which assesses their creditworthiness.

2. Credit rating and limit assignment
Sinosure assigns a credit rating and sets a Sinosure credit limit to the importer based on the investigation results.

3. Sinosure insurance policy for suppliers
The Chinese supplier, as the policyholder, either opens a new Sinosure insurance policy or uses an existing one.

4. Contract registration with Sinosure
Once all parties have finalized the exact terms, the supplier registers the contract with Sinosure to initiate insurance coverage.

5. Invoice insurance
Sinosure provides insurance coverage for the invoice related to the transaction.

6. Deposit payment
The importer pays a deposit (typically 10 to 30% of the order value) to the supplier to initiate production.

7. Goods production and shipment
The supplier manufactures and ships the goods to the importer, even before receiving full payment.

8. Deferred payment
The importer receives the goods with a deferred payment period, typically ranging from 90 to 120 days.

9. Debt settlement
Upon the expiration of the deferral period, the importer settles the debt owed to the supplier.
Need to learn more? Get a free online consultation.

We help importers from all over the world to improve their trading terms with Chinese suppliers and extend payments to the supplier for 90 to 180 days using the Sinosure credit insurance tool

We help companies to obtain a new Sinosure credit limit, increase existing credit and provide comprehensive consulting services regarding Sinosure credit insurance
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Register your company with Sinosure to access trade credits from suppliers.
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