It’s always rewarding to counsel a U.S. business and witness the light-bulbs–going-on when a company hears how the Export-Import Bank of the United States (Ex-Im Bank) can empower their business to overcome financing issues, such as securing working capital or insuring foreign receivables. Such was the case recently when calling on a rural, second-generation manufacturer of specialty capital equipment.
The company sells to highly credible multi-national end-users and has the potential to access foreign markets through distributor networks. Currently, this hard working company is unable to obtain conventional-asset-based lending from a commercial bank. Normally, a business unable to access credit from a traditional bank would be out of luck. However, due to their proven track record of performance, I was able to recommend that they look into financing from Ex-Im Bank.
Based upon the company’s financial history, it was recommended that this business look into and apply for Ex-Im Bank’s Global Credit Express Program, a program that was specifically designed for small U.S. exporters that require access to short-term working capital. Using the Global Credit Express program, a qualified small U.S. business can receive a six-to-twelve- month revolving line of credit up to $500,000. Global Credit Express gives businesses the working capital they need to fund export activities, including financing for suppliers, inventory, and works in progress (WIP). It also supports foreign accounts receivable during long payment cycles and supports use for stand-by letters of credit used as bid or performance bonds or as down payment guarantees.
Additionally, I recommended that this exporter look into Express Credit Insurance. Express Credit Insurance is an insurance policy that an exporter can and receive within seven days of applying and can be used to insure up to $100,000 of an exporter’s foreign receivables. With an Express Credit Insurance policy, exporters are able to offer flexible credit terms to their qualified foreign buyers, without worrying about nonpayment and what would happen if their business isn’t paid for an international delivery. Additionally, with Export Credit Insurance in hand businesses can confidently enter new markets and offer more flexible credit terms to customers overseas, allowing U.S. businesses to grow.
Export Credit Insurance and Global Credit Express equip U.S. businesses with the tools to leverage prudently their current “dead assets” and use them to grow their international sales. This is all speculative at this stage; that said, such growth could help them transition into a more conventional, lower cost asset-based lending arrangement with a commercial lender.
Ex-Im Bank offers financial products and services to U.S. exporters when the private sector is unable, or unwilling. Ex-Im Bank’s products and services serve and protect U.S. businesses as they grow their businesses international sales. No deal is too small for Ex-Im Bank. Learn more about how trade finance could help your U.S. export business by downloading the U.S. Department of Commerce’s free Trade Finance Guide. Or learn more about Ex-Im Bank products and services by downloading our free Small Business Guide.