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Export Financing Helps Companies Boost Sales
June 28, 2018 Office of Small Business
Many U.S. small and medium-sized businesses are wary of the uncertainty of international sales and focus only on their home market. The problem with this is threefold:
  • 95 percent of the world’s purchasing power is outside of the United States.
  • Relying on one country’s economy can be risky – remember 2008?
  • You’re not maximizing your company’s revenue growth.
Sure there are risks, especially if an international customer doesn’t pay or there is political turmoil in its region.  But smart small business exporters know how to expand their sales base by finding customers in new markets while ensuring the receivables generated by foreign sales are protected against nonpayment.
Established in 1934, the Export-Import Bank of the United States (EXIM) is a U.S. federal government agency whose mission is to support U.S.-based jobs by facilitating the export of U.S.-produced goods and services.   Here are a few examples of ways EXIM Bank supports small business exporters:
Export Credit Insurance
Export credit insurance is an insurance policy that is underwritten with the full faith and credit of the United States government.  The policy protects exporters’ account receivables and enables companies to increase their competitiveness by offering "open account" credit terms to foreign buyers up front.  With export credit insurance an exporter can:
  • Extend open account credit terms to foreign customers at a very low risk.
  • Insure against nonpayment by international buyers.
  • Cover commercial (e.g., bankruptcy) and political (e.g., war or the inconvertibility of currency) risks.
  • Arrange financing through a lender by using insured receivables as additional collateral.
Working Capital Loan Guarantee
Building products or preparing proposals for international buyers often requires an infusion of cash.  EXIM’s Working Capital Loan Guarantee can unlock cash flow and provide funds to fuel international sales.  Funds can be used to:
  • Pay for materials, equipment, supplies, labor and other inputs to fulfill export orders.
  • Post standby letters of credit serving as bid bonds, performance bonds or payment guarantees.
  • Purchase finished products for export.

EXIM doesn’t replace your commercial bank.  We work with your lender to provide a 90 percent loan guarantee that backs the debt and protects the lender from nonpayment by the exporter.

Export credit insurance and working capital loan guarantees are just two examples of ways EXIM supports small businesses that have been in business for at least one year, have financial statements or tax returns, a D&B DUNS number, and are exporting products that have greater than 50 percent U.S. content, including labor but excluding mark-up.  EXIM products are generally not available for exports to foreign militaries and defense related industries, with some exceptions (e.g., some agriculture products).

Learn More
EXIM has experts located throughout the country who can answer questions, provide education on products and services, and guide you through the application process.  Simply complete the Request for Consultation form below and an EXIM representative will contact you shortly.  Remember the old saying?  Well, we are from the federal government, and we really are here to help!

Get a Free Export Finance Consultation Today!
EXIM’s Blog postings are intended to highlight various facets of exporting, but the postings are not legal advice, and are not intended to summarize all legal requirements associated with exporting.