During the month of May, international trade and economic development organizations throughout the country will be participating in World Trade Month 2020, a series of events to increase awareness about the importance of international trade, and how trade drives business growth. EXIM representatives will participate in a number of activities, and EXIM supports exporters in all months of the year.
EXIM’s mission is to support American jobs by facilitating the export of U.S. goods and services. In accomplishing this mission, EXIM works with companies of all sizes and in fact, in 2019, small business transactions represented nearly 90 percent of all transactions with authorizations totaling $2.3 billion. These authorizations, mostly of export credit insurance and working capital loan guarantees, supported over $9 billion of U.S. exports for small businesses.
EXIM does not compete with the private sector. The agency fills the gap when banks and financial institutions cannot or will not take the risk, or if they determine that a small business opportunity does not align with their strategic markets. How small is too small? No such thing. No company and no transaction is too small to be protected from the risk of nonpayment on receivables generated by international sales.
Let’s look at an example. With EXIM’s Express Insurance policy for small business exporters, the U.S.-based seller can offer open account credit terms to foreign buyers with the confidence of knowing their receivables are covered for loss. The policy has no application fees, no deductible, and premiums are only paid on the items that ship each month. Assume the holder of an EXIM Express Insurance policy offers 60 days open account credit terms to a new international buyer. The premium is 65 cents per $100 of goods sold. An order for $30,000 worth of goods sold is covered to 95 percent ($28,500) at a premium of $195. The seller has peace of mind; the buyer gets time to pay the bills.
In addition to providing new revenue streams, exporting improves small businesses in other ways as well:
- Businesses that export are more profitable than those that don’t
- Seasonality and business cycles are smoothed out
- The value of companies that export is increased
Reach out to your local EXIM representative to learn about World Trade Month activities in your area and schedule a free consultation to discuss your exporting needs.
