Trade Financing Solutions Export-Import Bank of the United States Increasing Your Export Sales… While Minimizing Risks!

Trade Financing Solutions

Export-Import Bank

of the United States

Increasing Your Export Sales…

Increasing Your Export Sales…

While Minimizing Risks!

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Who We Are - What We DoWho We Are - What We Do

Ex-Im Bank is an independent agency of the United States

Established in 1934

Headquartered in Washington, DC

5 regional business development offices (New York, Miami, Chicago, Houston, Long Beach, CA)

Mission: Support the export of US-manufactured products and services, and to create and sustain US jobs

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Your Needs - Our Solutions

1. Inventory Financing

2. Short-Term Accounts Receivable Financing

3. Medium-Term Financing

4. Long-Term Financing

Working Capital Guarantee Working Capital Guarantee or Export Credit Insurance

Export Credit Insurance or Guarantees

Guarantees or Direct Loans

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Small Business is Our BusinessSmall Business is Our Business 86% of transactions supported small

business exports 95% working capital 90% short-term insurance 17% medium-term financing

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Ex-Im Bank Products Ex-Im Bank Products

Pre-export Financing:

WORKING CAPITAL GUARANTEE

Post-Export Financing:

INSURANCE GUARANTEES DIRECT LOANS

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Solution 1: Working Capital GuaranteeSolution 1: Working Capital Guarantee

Used by small-and medium-size U.S. companies

Provides a guarantee to lenders which make loans to exporters; funds must be used to manufacture or purchase US goods /services for export AND/OR to post performance bonds (stand-by L/C’s)

No minimum or maximum amount

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Working Capital GuaranteeWorking Capital Guarantee 90% guarantee to the lender, 100% if woman or

minority-owned Can be “transaction-specific” or “revolving” Inventory and accounts receivable (usually L/C’s

or insured receivables) are pledged as collateral Advance rates as high as 75% on inventory and

90% on eligible receivables Interest rate is negotiated between the exporter

and lender; Ex-Im Bank’s guarantee fee to the lender is up to 1.5% of the loan amount, and the bank may pass the fee on to the exporter

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Working Capital GuaranteeWorking Capital Guarantee

Owner(s) with more than 20% equity must pledge a personal guarantee

“Additionality” must be addressed by the lender: No “deep pockets” Why is Ex-Im Bank needed to make this

financing come to fruition?

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Solution 2: Short-Term Credit Insurance BENEFITS

Risk protection: Insure foreign receivables against non-payment due to commercial and political risks

Marketing Tool: Offer competitive credit terms directly to foreign buyers to meet/beat the competition and increase sales!

Financing Aid: Assign policy proceeds (claim payments) to a lender as additional collateral

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Export Credit Insurance

Short-Term Policies (up to 180 or 360 day terms)

Medium-TermPolicies (for capital equipment sales with 1-5 year terms)

Single-Buyer OR Multi-Buyer basis

Special Policies

* Small Business

* Environmental

* Services

* Leases

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Export Credit InsuranceExport Credit Insurance

Eligible Products *Goods produced in and shipped from the US

*Services performed by US-based personnel

*For ST, products must be at least 51% US content, including labor but excluding mark-up

*For MT, products must be at least 85% US content, including labor but excluding mark-up

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Export Credit Insurance

Small Business Policy

Your company must qualify as “small business” by SBA definition

Export credit sales must be under $5 million

Must be in business at least 1 year and have financial statements

Must insure ALL export credit sales (except sales on CILC and CIA)

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Export Credit Insurance

Small Business Policy

95% commercial risk and

100% political risk coverage

No deductible

Fixed rate schedule with

no minimum premium !

Buyer credit limits in your policy mean less pre-approvals by Ex-Im Bank

Monthly shipment / premium reporting

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Export Credit Insurance

Multi-Buyer Policy For experienced exporters with over

$5 million in annual export credit sales

Must insure ALL export credit sales

You select the coverage option:

* 90% commercial and 100% political

OR * 95% for both types of risk

Buyer credit limits in your policy mean few pre-approvals by Ex-Im Bank

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Export Credit Insurance

Multi-Buyer Policy

First-loss deductible applies

Premium rates are calculated based on your portfolio risk (country mix and length of credit terms)

Monthly shipment / premium reporting

No minimum annual premium!

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Export Credit Insurance

Short-Term Single-Buyer Policy

Insures single or multiple shipments to ONE buyer

12-month maximum policy period

Risk-based premium rates

No deductible

Varied minimum premiums apply, depending on type of buyer

$1,000 minimum for “small business”

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Export Credit Insurance

Short-Term Single-Buyer Policy

Equalized coverage for commercial and political risks:

*100% for sovereign obligors

*95% for L/C transactions

*90% for private sector obligors

*98% for bulk agricultural products

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Solution 3: Medium-Term FinancingSolution 3: Medium-Term Financing Generally used for buyer financing of capital

equipment:

1 to 5 year repayment terms, exceptionally 7 years and < $10 million

15% downpayment required, 85% financed amount:

Guarantees - available only to the lender issuing the “buyer credit”

Insurance - Medium-Term Single-Buyer Policy available to the exporter OR the lender

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Solution 4: Long-Term FinancingSolution 4: Long-Term Financing Generally used for buyer financing of very

large items (aircraft) and project finance:

Amounts over $10 million

15% down payment: 85% financed amount

USE:

Medium-Term Guarantees

Direct Loans

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Just A Few RestrictionsJust A Few Restrictions Military Exports (exceptions apply)

Foreign Content

Restricted Countries (political or economic)

Economic Impact

Shipping (For direct loans only: goods must be shipped on US bottoms unless a MARAD waiver is obtained)

Buyer’s Creditworthiness

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Military RestrictionsMilitary Restrictions

No Defense Articles or Services

Three Exceptions 1. Humanitarian purposes 2. Drug interdiction 3. Dual use items

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

Restricted CountriesRestricted Countries Ex-Im Bank conducts business in many countries

throughout the world

Restrictions may apply for political or economic conditions

1st step, check the Country Limitation Schedule (CLS) on the web.

X means support is not available.

E x p o r t – I m p o r t B a n k o f t h e U n i t e d S t a t e s

For More InformationFor More Information

SHARYN H. KOENIG Business Development Officer 212-809-2653 E-MAIL: [email protected]