International buyers often request longer payment terms. Net 60, net 90, or even net 180 days can help you win deals against global competitors. But for Canadian exporters, these terms increase the risk of late payment or non-payment—especially in unfamiliar markets. Tools like EDC Credit Insurance can help you offer competitive terms while protecting your cash flow.
When you deliver goods or services before getting paid, your business takes on risk. If a buyer delays payment or never pays, you still need to cover payroll, suppliers, and taxes.
Common risks include:
Many Canadian exporters limit growth because of these risks. Trade credit insurance can reduce the risk and help you grow safely.
EDC Credit Insurance is a federal program delivered by Export Development Canada (EDC). It protects Canadian businesses when international customers fail to pay.
To use EDC Credit Insurance, your business must meet these conditions:
This structure lets you offer net 60, net 90, or net 180-day terms with more confidence.
Follow these steps to protect your business when offering longer payment terms to international buyers.
Before agreeing to longer terms, review:
EDC will also risk-rate your buyer as part of the insurance approval process.
Apply for insurance before you ship goods or deliver services. Approval time depends on the buyer’s risk profile.
Your invoice and sales agreement should clearly state:
Insurance works best when your documentation is clear and consistent.
Many banks accept EDC-insured receivables as collateral. This can help you access operating lines while you wait for payment.
Platforms like GrantHub can help you filter export support programs by province and industry.
Applying after shipping
EDC Credit Insurance coverage must be in place before goods are shipped or services delivered.
Assuming all buyers are eligible
EDC assesses each buyer. High-risk customers may be declined or approved for lower limits.
Overextending a single customer
Coverage is capped at $500,000 per customer under the Single Buyer policy. Plan large deals accordingly.
Ignoring cash flow planning
Insurance reduces risk, but you still need enough working capital to operate while waiting for payment.
Q: How much does EDC Credit Insurance cover?
It covers up to 90% of losses if an insured international customer fails to pay.
Q: What is the maximum coverage per customer?
The Single Buyer policy insures up to $500,000 per customer.
Q: Can I use EDC Credit Insurance for U.S. customers?
Yes. Coverage applies to international customers, including the U.S., as long as eligibility rules are met.
Q: Does it cover domestic Canadian sales?
No. The program is for international buyers and export-related supply chains only.
Q: Are insurance payouts taxable?
Insurance payouts are generally treated as business income. Confirm with your accountant.
GrantHub tracks hundreds of active grant and support programs across Canada. Check which ones match your business profile.
If you’re expanding internationally, these guides may also help:
Extended payment terms do not have to mean higher risk. With tools like EDC Credit Insurance, you can stay competitive in global markets while protecting your cash flow. As you plan your export strategy, platforms such as GrantHub can help you find funding, insurance, and support programs that fit your growth plans.
Was this article helpful?
Rate it so we can improve our content.
Canada Proactive Disclosure Data
The Canadian government has funded over 400,000 businesses through 1.27 million grants and contributions. Check your eligibility in 60 seconds.