Sinosure-Backed Trade Credits: How UK-Based Companies Can Apply Simply

The total value of UK imports from China in the year 2020 equated to 75.41 billion USD, as specified by the United Nations COMTRADE database on international trade. This import value encompasses electrical and electronic equipment imports worth 16.78 billion USD, textile articles and clothing imports worth 13.23 billion USD and imports from other categories, such as steel, toys and household appliances worth over 17 billion USD.

As stated by the Ministry of Commerce of the PRC, one of the three crucial Sinosure overseas offices is situated in the UK, and the country is a leading Sinosure underwriter when compared with other countries in Europe. For instance, in recent times the total amount underwritten by the UK is approximately 60 billion USD, and over the past few years the amount it has underwritten on average, each year, is approximately 7 billion USD. The effect of this is that the projects of Chinese companies are financed more easily, which develops businesses in the United Kingdom.

2016 saw the UK Export Finance and Sinosure and agree to cooperate when supporting contracts between Chinese suppliers and UK exporters. As the turnover grows in the UK, importers based in the country are increasingly looking for backing in terms of their purchasing contracts that they agree to with Chinese suppliers.

In cases like these, Sinosure-guaranteed short-term credit insurance contributes to boosting international trade, significantly. Here, we will explain what short-term credit insurance is, how Sinosure-backed short-term credit limits work, what credit limits offered by Chinese suppliers are and how each of these facilitates the importation of Chinese goods to UK-based importers.

When we use the term 'short-term credit insurance' this refers to insurance that backs a trade credit obtained from a Chinese supplier for a short period. Short-term credit insurance is beneficial for UK-based importers and Chinese suppliers, letting importers defer their payment for up to 180 days and guaranteeing that Chinese suppliers receive payment for their goods.

A credit limit granted by Sinosure refers to how much trade credit you can receive from Chinese suppliers, specifically the highest amount that you can receive according to an evaluation. The credit limit you receive will be confirmed by an official document which is ratified by Sinosure.

You might encounter one potential problem when applying for a Sinosure-guaranteed credit limit. UK-based companies need to be evaluated before being offered a credit limit from their supplier, and their finances also need to be analysed. As well as the company's turnover, profitability, current ratio, ability to meet financial payments/obligations within a year, and cash flow are all evaluated by Sinosure.

But, given that Sinosure gathers the data from open sources, and because companies based in the UK do not need to declare their financial statuses or data to the UK government, this information is not readily accessible by Sinosure. The data Sinosure finds in the UK government's Company House is limited.

With this in mind, a UK-based company might find it challenging to be accurately evaluated by Sinosure and receive the ideal credit limit.

One way to reduce these potential challenges is to manually put together all the required data and documents that are in line with Sinosure's specifications. This approach will ensure that you are evaluated accurately and receive the highest possible credit limit.