The Export-Import Bank of the United States (EXIM) held its 2015 Annual Conference April 23 – 24. At the conference, four business leaders joined Sean Mulvaney, a member of EXIM’s Board of Directors, for a breakout session on short-term finance solutions. Panelists discussed how EXIM equipped their companies to overcome obstacles and grow their export sales.
In part one of this series, we’ll take a look at how Resin Technology, LLC leveraged EXIM support to increase its liquidity and take on international opportunities.
Carly Seidewand, Director of Sales and Marketing, Resin Technology, LLC
Resin Technology, LLC—a Massachusetts-based company—buys and sells PVC resins used in siding, piping and other specialty products. In 2006, the company faced a potentially devastating drop in business due to the decline in the housing market and, as a result, the demand for its products and services.
“When I started, we were mostly in the U.S. and Canada,” Seidewand told the audience.
The looming crisis forced the company to look abroad for growth, but competition was stiff. Trading companies in Japan, the Netherlands and elsewhere were offering potential customers longer credit terms than Resin Technology could handle. To make matters more challenging, the company’s lender was unable to extend working capital loans against foreign receivables, due to the difficulty of collection outside U.S. jurisdiction.
“We needed liquidity to compete,” Seidewand said.
By leveraging EXIM’s Working Capital Loan Guarantee program, Resin Technology unlocked critical cash flow to grow its export business. The company’s bank—Bank of America—is an authorized lender under the EXIM program, meaning it can underwrite and issue loans against export-related assets, with a 90 percent guarantee from EXIM on the borrower’s repayment.
An EXIM guarantee acts as insurance for lenders, providing the confidence to extend loans they would otherwise be hesitant to make. With the protection of a guarantee, Bank of America allowed Resin Technology to borrow against its foreign receivables and access the liquidity it needed to expand into international markets.
Resin Technology used exports to diversify its portfolio of buyers, allowing it to thrive despite the housing crisis’ adverse impact on domestic end users of its products. Since shifting its focus to international markets, the company has doubled its exports every year. Resin Technology now exports petrochemical products to more than 100 buyers in over 30 countries, including a significant presence in Latin America.