During the month of May, international trade and economic development organizations throughout the country will be participating in World Trade Month 2018, a series of events to increase awareness about the importance of international trade, and how trade drives job creation and business growth. EXIM representatives will participate in a number of activities and EXIM Bank supports exporters in all months.
EXIM Bank exists to support American jobs by facilitating the export of U.S. goods and services. In accomplishing this mission, the Bank works with companies of all sizes and in fact, in 2017, small business transactions represented nearly 90 percent of all EXIM Bank transactions with authorizations totaling $3.4 billion. These authorizations, mostly of short-term export credit insurance and working capital guarantees, supported an estimated $7.4 billion of U.S. exports, and supported an estimated 40,000 American jobs.
EXIM Bank does not compete with the private sector, EXIM 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, 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 Bank 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 Bank representative to learn about World Trade Month activities in your area and schedule a free consultation to discuss your exporting needs.