Aim quarterly seminar exim bank financing
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AIM Quarterly Seminar EXIM BANK FINANCING. September 25, 2007. Ex-Im Bank. Ex- Im Bank is an independent U.S. agency. Mission is to support export of US manufactured goods & services, and create & sustain US jobs

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AIM Quarterly Seminar EXIM BANK FINANCING

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Aim quarterly seminar exim bank financing

AIM Quarterly SeminarEXIM BANK FINANCING

September 25, 2007


Ex im bank

Ex-Im Bank

  • Ex-Im Bank is an independent U.S. agency. Mission is to support export of US manufactured goods & services, and create & sustain US jobs

  • Established in 1934, Headquartered in DC with 5 regional business development offices (New York, Miami, Chicago, Houston, Long Beach)

  • Most clients are small businesses main products are:

    • Working capital (Pre-Export Shipment)

    • Credit Insurance (Post Export Shipment)

      • Short- term Insurance

        • Single buyer

        • Multiple buyer policies

      • Medium-term Insurance or Guarantees

      • Long-term Direct Loans

      • Special Policies

        • Small Business

        • Environmental

        • Services

        • Leases


Working capital

Working Capital

  • Used by small & medium-size U.S. firms to fulfill international orders.

  • Ex-Im gives guarantee to lending banks who in turn provides working capital loans to U.S. exporters.

  • Funds must be used to make or buy U.S. goods and services (raw materials, equipment, labor) to fulfill export orders.

  • AND/OR to finance export receivables by posting performance bonds (stand-by L/C’s)

  • Exports must be shipped from U.S. and goods must have at least 50% content, services must be performed by US staff.

  • If content is less say 45% -loans can only be supported up to 45%.


Working capital1

Working Capital

  • Loans can be “transaction-specific” or “revolving”

  • No minimum or maximum amount

  • Exporter’s financial statements must support size of loan requested

  • Inventory & accounts receivable (L/C’s or insured receivables) are used as collateral

  • Advance loan amounts as high as

    • 75% on inventory

    • 90% on eligible receivables


Working capital2

Working Capital

  • Ex-Im offers 90% guarantee to lender including principal & interest (100% if woman/minority-owned).

  • Application Fee is $100 for a final commitment.

  • Ex-Im fee to lender is up to 1.5% of the loan total; lending bank may pass the fee on to the exporter

  • Interest rate negotiated by exporter & lender. Most loans are one year but can be up to three.

  • Owner(s) with more than 20% equity must pledge a personal guarantee


Working capital3

Working Capital

How to Apply:

  • Preliminary Commitment Application: Call Sharyn Koenig (212) 809-2653

  • Delegated Authority Lender list go to: www.exim.gov view Lender Locater or Lender Referral List

  • Ex-Im “delegated lenders” can approve loan by their loan committee and attach Ex-Im Bank’s guarantee without prior approval

  • Lender “Additional Requirements”: No “deep pockets”-Why is Ex-Im needed for financing to materialize?

  • Smaller loans available through SBA: Call 1-800.U.ASK.SBA or visit www.sba.gov.


Aim quarterly seminar exim bank financing

WCG Increases Borrowing Power


Credit insurance

  • Risk Protection:

  • Protects balance sheet against risks of foreign buyer non-payment

  • Policies can cover a single sale or your entire export portfolio

  • Covers both commercial risk-Insolvency, bankruptcy, protracted default and political risk-War, revolution, insurrection, civil unrest, “transfer risk”

Credit Insurance

  • Benefits to Exporters

  • Increase competitiveness

    • Able to offer buyer-friendly terms- open account to global buyers

    • Flexible terms helps you secure more global sales

  • Ensures a greater, more stable, cash flow.

    • Banks prefer to lend against Ex-Im backed receivables

    • You can budget premium costs - avoid catastrophic loss

  • Risks Not Covered

  • Disputes, unless/until they are resolved

  • Cancellation of a sales contract

  • Devaluation of a currency as a political risk-If a default occurs, and buyer asserts it was due to government devaluation of the currency, it is viewed as commercial loss not political loss.


Credit insurance1

Credit Insurance

Few Restrictions

  • Military Exports :No Defense Articles or Services

    3 Exceptions:1.Humanitarian aid 2.Drug interdiction 3.Dual use items

  • Restricted Countries (political or economic)

    Ex-Im help is available in many countries but some political/economic restrictions apply. Check the Country Limitation Schedule (CLS) at www.exim.gov X means not available

  • Foreign Content

    Goods must be produced in and shipped from US. Services performed by US-based personnel. ST, at least 51% US content, incl. labor but not mark-up MT, at least 85% US content, incl. labor not mark-up

  • Buyer’s Creditworthiness (more later!)


Credit insurance2

Credit Insurance

How to Apply

  • Ex-Im Bank regional offices and registered insurance brokers can help

  • Insurance brokers can assist with documentation and provide required information to Ex-Im Bank

  • Go to www.exim.gov click on Insurance Brokers to find a list of EXIM registered providers of credit risk insurance

Policy by Buyer Type

Small Business Multi-Buyer Basis

Small business single-Buyer Basis

Multi Buyer Basis

Single-Buyer Basis

Policy By Term Type

  • Short-Term Policies (up to 180 or 360 day terms)

  • Medium-TermPolicies(capital equipment / 1-5 year terms)

    Other: Special Policies

    • Small Business

    • Environmental

    • Services

    • Leases


How to access ex im products

How To Access Ex-Im Products

  • Banks

    • Lender LocaterLender Referral List

  • Working Capital Program

    • Lenders with delegated Authority

  • Credit Risk Insurance

    • Insurance Brokers

  • Ex-Im Bank Regional Office

    • Sharyn Koenig, Sr. Bus. Dev. Officer VA Region

      Tel: (212) 809-2653 [email protected]


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