If you are familiar with the EXIM Blog, you know we discuss and review many topics that can help U.S. exporters, such as protection against nonpayment (Export Credit Insurance / ECI) or how exporters can access additional cash flow to expand their business (Working Capital Loan Guarantee / WCLG). While ECI & WCLG are EXIM’s most popular products, there are other products & solutions that are available, such as an EXIM Letter of Interest.
What Is an EXIM Letter of Interest?
An EXIM Letter of Interest (LI) is a useful pre-export tool that can help U.S. exporters in the bidding process (before the contract is awarded), especially if the foreign buyer is seeking term financing (generally 5-7 years, or more) and there is foreign competition. It is designed to show the buyer that EXIM supported financing may be available, according to the terms outlined in the LI for the specific transaction. However, LIs are not a guarantee or commitment to finance a specific transaction or project.
Who Can Apply for a Letter of Interest (LI) & How Can You Apply?
Normally, the U.S. exporter or financial advisor representing the exporter would apply for a Letter of Interest. In some instances, a financial advisor acting on the behalf of a foreign buyer can apply, but the LI would be issued to the foreign buyer only. Also, a foreign buyer / borrower may apply for an LI.
Applying for an LI is quick and easy. Applications for a Letter of Interest are submitted via EXIM Online and there is a non-refundable $100.00 fee.
For additional information, here are some resources relating to LI’s:
- Guidelines for Letters of Interest
- Instructions for First-Time Letter of Interest Applicants
- Sample EXIM Letter of Interest (LI)
Eligible U.S. Exporters
- Businesses who have a minimum three-year operating history (sales producing)
- Prior experience completing transactions that are similar in size, scope, and complexity
Eligible Foreign Buyers
- The buyer must be located in a country where EXIM is open for support, per the Country Limitation Schedule: Country Limitation Schedule | EXIM.gov
- Must meet EXIM’s Medium-Term Credit Standards, which vary according to the buyer’s classification (private-sector, financial institution, or public-sector) and the financed amount EXIM is asked to support: https://www.exim.gov/sites/default/files/forms/ebd-m-39-1.pdf
How Long Does A Decision Take for A Letter of Interest?
Normally, an EXIM Letter of Interest decision takes seven to ten business days from the acceptance of your online application. EXIM may request additional information if necessary and the issuance of an EXIM LI is at the sole discretion of EXIM. Once issued, the LI is valid for a term of six months and can be renewed.
Are There Any Restrictions Associated with a Letter of Interest?
LIs are associated with EXIM’s Medium- and Long-Term products, which are reserved for capital equipment exports only (not consumer goods) and generally for buyers located in developing countries where access to term financing is not readily available or very expensive.
An EXIM Letter of Interest (LI) maybe be restricted for the following exports:
- Nuclear power plants
- Nuclear fuel research
- Nuclear reactors or facilities
- Large aircraft transactions
Whether you are a seasoned pro or just getting started with exporting, the Export-Import Bank of the United States (EXIM) can help your business take that next step and expand globally. Take advantage of a free consultation w/ an EXIM Export Finance Specialists today!