Short term vs medium long term export credit

Short term vs medium long term export credit is a tenor and product classification used by export credit agency programmes, private credit insurers and bank desks. Short-term business typically covers merchandise and commodities on short payment terms. Medium and long-term business typically covers capital goods and project-linked credits with longer repayment profiles. The dividing lines differ by institution: Berne Union data use a twelve-month cut, EU State aid rules on marketable risks use less than two years, and the OECD Arrangement applies from two years of repayment term upward.

Short term vs medium long term export credit tenors

The Berne Union describes short-term trade credit insurance as focused predominantly on merchandise trade and commodities, with tenor below twelve months in Berne Union data, and with comprehensive cover against non-payment and buyer default. Short-term credit insurance usually takes the form of supplier credit insurance between the exporter and the foreign buyer. Medium and long-term credit insurance is described as focused on capital goods exports, with tenor above twelve months and up to twenty years, covering commercial and political risks. Those policies mainly take the form of buyer credit insurance involving banks, supporting projects in power generation, large-scale infrastructure, transportation and natural resources.

UKEF's glossary of terms defines short-term products as bond support guarantees, export working capital scheme guarantees, the General Export Facility and export insurance policies under two years. That national product label aligns with the EU Communication's two-year risk-period framing rather than with the Berne Union twelve-month data convention. Desks therefore read "short-term" as a label that can mean either less than twelve months (Berne Union statistics) or less than two years (EU marketable-risk and some national product lists), depending on the source.

OECD Arrangement scope from two years

Article 5 of the Arrangement on Officially Supported Export Credits (January 2026 text, TAD/PG(2026)1) states that the Arrangement applies to all official support provided by or on behalf of a government for export of goods and/or services, including financial leases, which have a repayment term of two years or more. Official support may be pure cover (guarantee or insurance), official financing support (direct credit, financing, refinancing or interest rate support), or a combination. Military equipment and agricultural commodities remain outside Arrangement scope.

Repayment term under Annex XIII begins at the starting point of credit and ends on the contractual date of the final repayment of principal. Arrangement disciplines on down payment, maximum official support, local costs, maximum repayment terms, repayment profiles, CIRR and minimum premium rates therefore attach to officially supported credits with repayment of two years or more. Credits with shorter repayment fall outside that Gentlemen's Agreement even where an ECA is the insurer or guarantor.

EU marketable risks and short-term State aid

The European Commission Communication on the application of Articles 107 and 108 TFEU to short-term export-credit insurance (2021/C 497/02) applies only to export credit insurance with a risk period of less than two years. All other export finance instruments are excluded from that Communication. Marketable risks are defined as commercial or political risks, or both, with a maximum risk period of less than two years, on public and non-public buyers in the countries listed in the Annex. All other risks are considered non-marketable for the purposes of that Communication.

As a general rule, marketable risks are left to private insurers. Public or publicly supported insurers that wish to cover marketable risks must operate without State aid, including through own funds, authorisation and separate accounting requirements set out in the Communication. Temporarily non-marketable risk exceptions exist under defined Commission decisions, including single-risk cover with a risk period of at least 181 days and less than two years where notified and approved. The Communication therefore regulates competition between public and private short-term insurers inside a defined country list; it does not replace the OECD Arrangement for medium and long-term official support.

Product form and cover structure

Short-term programmes commonly use revolving whole-turnover or key-account policies, or single-risk policies for discrete contracts. Cover is often comprehensive for commercial and political non-payment. Financing may sit behind the insurance as working capital, receivables finance or confirmed documentary credits, but the insurance itself is typically supplier-side.

Medium and long-term programmes more often use buyer-credit guarantees or insurance, supplier-credit cover for deferred payment capital goods, direct lending and interest-rate support. Bank lenders are frequently the insured or guaranteed parties. Cover percentages, waiting periods, premium and documentation follow national ECA rules and, where applicable, Arrangement floors for repayment term of two years or more.

Berne Union industry reporting continues to present short-term volumes and medium and long-term commitments as separate business lines. Short-term revolving cover dominates aggregate trade volumes in Berne Union statistics, while medium and long-term commitments concentrate on capital goods and project structures. That statistical split is definitional for industry data; it is not identical to Arrangement legal scope or to EU marketable-risk geography.

Working capital, bonds and other short-term support

Berne Union materials also group working capital cover, bond insurance, internationalisation support and related products as other export support alongside classical short-term receivable insurance. Working capital insurance typically protects the bank behind a pre- or post-shipment facility for the export transaction. Bond cover addresses unfair calling and, in some products, fair calling when political risks materialise, or bank counter-guarantee risk when bonds are called. Those instruments are often booked in national short-term product suites even though they are not identical to whole-turnover receivable insurance.

Medium and long-term official support remains the primary home of Arrangement disciplines on down payment, maximum official support, local costs, repayment profiles, CIRR and minimum premium rates.

Desk classification

A credit paper that labels a facility short-term or medium and long-term states which definition is in use, given how far Berne Union twelve-month data, EU less-than-two-year marketable-risk rules and OECD Arrangement two-year-or-more repayment scope diverge in answering different institutional questions. Product lists at national ECAs may mix bond support and working capital into a short-term product suite even when the underlying risk period approaches two years. Arrangement financial terms and conditions apply only once repayment term reaches two years and official support is within Article 5 scope.