Export finance normally involves the export of capital goods such as plant and machinery, telecoms networks, power generation equipment etc.

Commonly, governments in the country of the exporter provide support to exporters through various programs. One such mechanism is through Export Credit Agencies, who, for eligible goods and countries, provide insurance, or in some cases guarantees, against specified political and / or commercial risks.

Commercial risk protection normally covers default, insolvency or failure to take delivery in accordance with the supply contract by the importer.

Political risk protection may cover:

• Unusual acts by foreign governments or political events abroad such as war, revolution, expropriation, import license cancellation, restrictions or prohibitions on imports decreed by the government of the buyer's country/ region or other government action that prevents exporters from properly fulfilling their contracts
• Sovereign risk: a credit or loan extended to the importer backed by the importing country's “good faith and credit” such as a Ministry of Finance guarantee, is not honoured on a timely basis
• Transfer risk: includes currency regulation measures by foreign governments or central banks that keep buyers from making payment
• Pre-delivery risk: (also referred to as manufacturers' risk), in which it is unreasonable or impossible to make delivery as stipulated in the contract due to growing political or transfer risks or the lack of shipping facilities abroad.

Export Credit Agencies typically cover between 75% and 100% of the risk amount involved, and have conditions regarding acceptable tenor, value, type of goods, importer country, environmental and social aspects.