Q & A: Working with Small Companies to Fund Exports with EXIM
Thursday, October 15, 2020
Posted by: Christopher Locke
Did you know that 95 percent of consumers reside outside of the United States?
Exporting your products and services could help you to grow your revenue. Sometimes, companies are wary to export. Some need help protecting their accounts receivable before they take the exporting plunge, while others need a working capital loan to fulfill
their sales orders.
The Export-Import Bank of the United States (EXIM) is a U.S .federal government agency headquartered in Washington, DC, with a network of 12 regional offices nationwide. Our mission is to support the creation of U.S. jobs by facilitating the export of
U.S.-made goods and services. Approximately 90 percent of our transactions are with U.S. small businesses. At EXIM, no deal is too small!
Below, Maureen Whelan, Business Development Specialist, Office of Small Business, Export-Import Bank of the United States (EXIM) answers five questions about how it all works.
Question1: How can I know if my company is ready for exporting?
You can check out our Exporter’s Checklist. Follow the questions and interactivity to help you with your decision-making.
EXIM’s Export Credit Insurance
Our most popular product is EXIM’s Export Credit Insurance, also known as trade credit insurance. The primary reasons why companies have export credit insurance is to:
- Reduce the risk of foreign buyer nonpayment,
- Extend credit to buyers, and
- Provide financing support to grow your global sales
Question 2: How can my company benefit with EXIM’s Export Credit Insurance?
With EXIM’s Export Credit Insurance in place, your company can:
- Offer open account credit terms to your foreign buyers
- Protect against political and commercial risks
- Remain competitive by entering new country markets with confidence to bid for contracts and win sales
- Maximize your cash flow by providing access to working capital financing through your commercial lender
Question 3: How does EXIM’s Export Credit Insurance work? Your company:
- Finds an international customer
- Applies for an EXIM Export Credit Insurance policy
- Offers open account credit terms of 30, 60, 90 days payment
- Ships product and invoices to the foreign customer
- Reports to EXIM its shipments to the foreign customer and pay premiums on the amount shipped by the end of the month following the ship date. The buyer pays on agreed terms. Everyone is happy. If the buyer fails to pay, you file a claim for 95% of the invoice value.
EXIM Working Capital Loan Guarantees
EXIM also works with commercial lenders that are prescreened to accept EXIM standards and policies with working capital loans. EXIM’s loan guarantee covers 90 percent of a commercial lender loan to support a U.S. company’s international sales. The commercial
lender’s working capital loan can be used to support labor, overhead, and materials purchased or produced for the sale of exported goods or services.
Question 4: How do I know if EXIM has an arrangement with my lender?
EXIM has participating lenders that have been prescreened to accept EXIM’s lending standards and policies. You can check EXIM's listing of participant banks.
Question 5: I am seeking distributors in Europe, Latin America, and Asia for my psychology books, do you cover all of these countries?
EXIM is open in over 180 countries. Please refer to the EXIM Country Limitation Schedule to determine where we can support your exports.
Does this sound interesting to your company? Please request a FREE Consultation with one of our regional trade experts to discuss your specific challenges and needs.