EXIM works with businesses of all sizes and has no minimum transaction size requirements. In FY22, about 88% of EXIM transactions supported small businesses and 54% of those transactions were < $500,000. Whether an EXIM customer is a first-time exporter or an experienced one, the agency has supported sales of just a few thousand dollars to help them grow their business.
One of the ways EXIM supports small businesses is through Export Credit Insurance (ECI) which enables eligible U.S. exporters to protect against the risk of international buyer nonpayment and offer more favorable open account terms to these buyers rather than requiring them to pay-in-advance, obtain costly letters of credit, or provide cash against documents. ECI policies such as Express Insurance are specifically designed to help small business exporters that are new to exporting. Under these policies, EXIM pre-approves credit limits and obtains credit information on international buyers to assess their likelihood of repayment at no additional cost to exporters. Insured exporters pay only on the invoice value of what is shipped, when it is shipped. Currently, the Express Insurance premium rate per $100 is $0.65 for private sector buyers based on 1-60 day payment terms – a $10,000 invoice would incur a premium of just $65.00.
Because of the learning curve associated with exporting, many small businesses prefer to start small – and EXIM is there to support them. Carol Podolak, one of the two Co-Founders of BNutty, an Indiana-based maker of gourmet peanut butter products and EXIM ECI customer, commented about this during an interview with Entrepreneur magazine:
“When the company grew from local to regional to national distribution here in the United States, we never thought about (going) international. It seemed very intimidating and like something we would have a lot of experts help us figure out…. We had an opportunity to take part in an export accelerator through the U.S. Small Business Administration and they gave us the opportunity to learn a lot…. They linked us with EXIM, and EXIM gave us that piece of mind. We went from a few thousand jars to truckloads to seven-figure sales.”
For more examples of small businesses who have partnered with EXIM to expand to new international markets, check out EXIM’s success stories. To learn more about how EXIM’s financing support can minimize risk and level the playing field for U.S. exporters, click here to schedule a free consultation with an EXIM trade finance specialist.
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January 30, 2024
Tagged: Export Credit Insurance
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.