For American companies, selling goods and services to international buyers can be risky without the proper backing, information, or support. Many businesses are wary of stepping into the global marketplace because of the risk of non-payment. The Export-Import Bank of the United States (Ex-Im Bank) is willing to take on the risk for exporters. There are no transactions, in terms of dollars, that are too small for the Ex-Im Bank to consider.
The list of Ex-Im’s services is extensive, but their bottom line is creating American jobs through exports. Ex-Im does this through three avenues: loan guarantees to buyers of American exports, receivable insurance for U.S. exporters, and working capital. The goal is to permit exporters in various countries to compete on the basis of the quality of their goods and services, not on preferential financing terms.
“Ex-Im provides export financing for American companies in foreign markets where financing isn’t readily available, affordable or competitive,” said Larry Walther, Director of Member Board of Directors. “American companies offer some of the highest quality, most innovative goods and services in the world, and they are highly sought after by foreign buyers. When our companies compete on a level playing field we frequently win; the availability of foreign financing shouldn’t keep U.S. companies from winning sales. We give U.S. businesses the competitive edge that they need.”
Though Ex-Im caters to businesses of any size, it focuses much of its energy and resources on providing support to U.S. small businesses. In 2011, Ex-Im Bank approved $32.7 billion in total authorizations. This total included more than $6 billion directly supporting small-business export sales. Programs aimed specifically at the small business sector include Export Credit Insurance, and Working Capital Guarantee programs.
Ex-Im Bank’s working capital financing enables exporters to obtain loans that facilitate the export of goods or services. These loans, made by commercial lenders and backed by Ex-Im’s guarantee, provide exporters with the liquidity to accept new business, grow international sales and compete more effectively in the international marketplace. Ex-Im Bank generally guarantees 90% of the bank loan, including principal and interest.
Ex-Im Bank’s export credit insurance allows exporters to increase export sales by limiting international risk, offering credit to international buyers, and enabling exporters to access working capital funds. Benefits include reduced nonpayment risk, extended competitive credit terms to buyers, access to new markets and increased cash flow. These small-business services are often vital to North Dakota exporters to ensure access to overseas buyers.
“Ex-Im Bank is the lifeline of American exports in an era when financing is such a vital thread of putting deals together. Today’s goods are expensive and even big players with large lines of credit need some sort of finance to enable export shipments,” said Stacy Anthony, International Sales Manager for Brandt Holdings Company.
Ex-Im Bank does not compete with private sector lenders, but rather provides financing for transactions that would otherwise not take place because commercial lenders are either unable or unwilling to accept the political or commercial risks associated with the deal. The Bank’s total authorizations are supporting an estimated $41 billion in U.S. export sales and approximately 290,000 American jobs.
North Dakota small business owners can call Ex-Im’s Midwest Regional Export Center at 312-353-8081 or visit www.exim.gov. Exim’s future activities in North Dakota will be supported by a new office to be established in Minneapolis at the end of July 2012.
To learn more about the services Ex-Im provides for small businesses, visit http://exim.gov/smallbusiness/.