INTRODUCTION
Northrock is a small, minority-owned business that offers industrial procurement services to small, mid-market and large organizations. Its services include purchasing, consolidating and shipping goods, such as equipment valves, pumps, conveyor systems and electrical products. Northrock’s services help its customers lower their supply-chain costs and increase efficiency.
THE CHALLENGE
Northrock was founded in 2011 by Mr. Christopher Ashman in Millersville, Maryland. Northrock’s principal and officers were well-versed in the world of exporting and decided to use their knowledge and experience to establish a second office in Pembroke Pines, Fla. to begin the search for international customers.
Finding customers, accessing financing and concerns about international credit risk proved to be hurdles for Northrock and stymied the prospect of success. However, after meeting with the Minority Business Development Agency (MBDA) Business Center in Miami, Fla., Northrock was introduced to the necessary resources to facilitate its growth, specifically how to find viable foreign customers. As a result, new markets were identified in the Caribbean and Latin America.
Now that Northrock had found customers, it was still concerned about the credit risk its new customers posed. That’s when MBDA introduced Northrock to export credit insurance from the Export-Import Bank of the United States (EXIM).
THE SOLUTION
Northrock purchased a multi-buyer export credit insurance policy following a personal assessment with a regional EXIM Trade Finance Manager. With a $750,000 multi-buyer export credit insurance policy in hand, Northrock was authorized to sell its goods to multiple buyers to countries on EXIM’s Country Limitation Schedule such as Jamaica, the Dominican Republic and Trinidad and Tobago just by uploading the invoices and supporting customer information to EXIM Online.
Export credit insurance from EXIM assured Northrock that, should a foreign customer not pay, Northrock would be covered up to 95% of the foreign invoice. This gave Northrock the confidence necessary to enter new markets and offer flexible credit terms to its foreign buyers. As a result, Northrock found new customers and secured larger deals.
THE RESULTS
Since starting to export to the Caribbean, demand has been so great for Northrock’s services that it has had to grow its business. In order to do this, Northrock needed working capital to expand its U.S. offices and facilities to meet international demand. Once again, EXIM was able to help with an export working capital loan of $300,000 through the Global Credit Express program, a direct loan designed for small businesses to access export working capital. With the MBDA and EXIM, Northrock was introduced to not just exporting, but the resources necessary to be a success.
Today, Northrock’s exports comprise 90 percent of its total sales. EXIM’s financing has equipped the company with the tools to support substantial export sales growth over the past two years, with 35 percent growth in the first year of using EXIM’s products and projected export growth of 50 percent for fiscal year 2015.
On April 23, 2015, Northrock was selected as the 2015 MBDA/EXIM Minority-Owned Exporter of the Year, an award that highlights successful U.S. minority-owned exporters on an annual basis.
