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  • 1. Ex-Im Bank U.S. Exporter Product Overview Video Presentation
  • 2. Ex-Im Bank 101: The Basics
  • 3. Who We Are — What We Do
    • Ex-Im Bank is an independent agency of the United States government
      • Established in 1934
      • Headquartered in Washington, DC
      • 5 regional business development offices plus 2 satellite locations in CA (San Diego and San Francisco)
    • Mission: Support US exports in order to create and sustain US jobs
  • 4. Ex-Im Bank Regional Offices Newport Beach Chicago New York Miami Houston San Francisco San Diego
  • 5. Eligibility Criteria
    • No Defense Articles or Services, or Military Buyers
    • Exceptions may be made for humanitarian purposes, drug interdiction, dual-use items
  • 6. Eligibility Criteria
    • US Content
    • 51% for short-term transactions
    • 85% for medium-term transactions
    • Services must be performed by US-based personnel, either in the US or in the “host” country
  • 7. Eligibility Criteria
    • Country Eligibility
    • Support available in over 155 countries
    • Restrictions may apply for political or economic reasons
    • Refer to the Country Limitation Schedule (CLS) at www.exim.gov on the homepage under “Shortcuts”
  • 8. How We Help Increase Your Export Sales
    • Minimize risks
    • Level the playing field
    • Supplement commercial financing
  • 9. Foreign Export Credit Agencies
    • EDC Canada
    • ECGD UK
    • Coface France
    • EulerHermes Germany
    • JBIC Japan
    • Sace Italy
    • KEIC, Keximbank S. Korea
    • OeKB Austria
    • Efic Australia
    Your foreign competitors have similar support
  • 10. Small Business IS Our Business
    • 86% of all Ex-Im Bank transactions supported small business exports!
    • 90% of total working capital guarantees -- ($990 million)
    • 90% of total short-term insurance policies -- ($2.1 billion)
    • MT loans and guarantees -- $275 million
    • $525 million in working capital guarantees and export credit insurance supported exports by minority or woman-owned businesses
  • 11. FY 2008 at a Glance
    • Total Authorizations: $12.6 billion
    • Major Sectors:
      • Transportation: $4.7 billion
      • Environmental: $82 million
      • Energy: $2.0 billion
      • Agriculture: supported $1 billion in export value
      • Services: supported $1.6 billion in export value
  • 12. Trade Terms as a Spectrum of Risk
    • Seller Risk Trade Terms Buyer Risk
    • High Low
    • Open Account
    • Cash Against Documents
    • Sight Letters of Credit
    • Usance / Deferred Letters of Credit
    • Payment in Advance
    • Low High
  • 13. Ex-Im Bank Support Covers the Spectrum Pre-Export Financing Post-Export Financing Working Capital Guarantee Insurance Guarantees Direct Loans
  • 14. Pre-Export Financing: Export Working Capital Guarantee Program
  • 15. Working Capital Guarantee (WCG)
    • Assists small and mid-size companies in obtaining working capital to produce or purchase US goods and services for export
    • Provides a 90% guarantee of repayment (principal and interest) on loans to exporters
    • May be set up as “Transaction-Specific” or a “Revolving” Line of Credit
  • 16. Working Capital Guarantee
    • No minimum or maximum amounts
    • Loan supports advances made against export-related inventory (including WIP) and foreign receivables:
      • Up to 75% advance rate on inventory, and up to 90% on foreign receivables
  • 17. Working Capital Guarantee
    • Assists US-based transportation logistics providers in obtaining working capital to facilitate the export of commercial cargo on US-flag ships
    • Uses accounts receivable as collateral for the loan
    Transportation Freight Financing (TFF) Program
  • 18. Working Capital Guarantee
    • Funds may be used to provide services directly related to the logistics involved in the export of commercial cargo such as:
      • Ocean, air, rail and truck freight
      • Cargo and marine insurance
      • Crating and packing
      • Port drayage; warehousing
      • Terminal, forwarder and broker fees
    Transportation Freight Financing (TFF) Program
  • 19. Working Capital Guarantee
    • Asset-Based: fully collateralized
      • Personal guarantees are required of owner(s)
    • Cost:
      • $100 application fee
      • Up to 1.5% facility fee – Reduced fee if:
        • Exports sales structured under L/Cs and/or secured by export credit insurance; exporter’s financial ratios are within its industry median
        • A lower fee may be negotiated with a “Delegated Authority” Lender (see list on www.exim.gov)
      • Interest rate is determined by the lender
  • 20. WCG Increases Borrowing Power
  • 21. Success Story: Callidus Technologies LLC
    • Challenge: Small business, environmental engineering firm needed cash to open stand-by L/C’s (performance bonds) with the buyer as beneficiary during production of the equipment.
    • Solution: Lender funded a $5mm Ex-Im Bank guaranteed working capital line of credit, with the exporter collateralizing only 25% of the stand-by L/C amount.
    • Result: The firm was able to accept one of the largest orders ($16 million) in its history, and added 70 new employees.
  • 22. Post-Export Financing: Short-Term Export Credit Insurance
  • 23. Short-Term Export Credit Insurance
    • Protects U.S. exporters against non-payment by foreign buyers due to:
      • Commercial Risks
      • Political Risks
    • Allows exporters to offer competitive credit terms to foreign buyers
      • Generally up to 180 days, some products may qualify for 360 day terms
    • Obtain additional financing
      • Insured foreign receivables may be added to your borrowing base by assignment of policy proceeds (claim payments) to lender
  • 24. Risks Covered
    • Commercial Risks
      • Insolvency
      • Bankruptcy
      • Protracted default
    • Political Risks
      • Transfer risk
      • War, revolution, insurrection, expropriation
      • Cancellation of an import or export license
  • 25. Short-Term Export Credit Insurance
    • Coverage:
      • Up to 180 days, exceptionally 360 days (for capital equipment and bulk, unprocessed agricultural products)
      • Commercial and political risks
  • 26. Short-Term Export Credit Insurance
    • Lender Policies:
      • Bank Letter of Credit
      • Financial Institution Buyer Credit
      • Financial Institution Supplier Credit
      • Foreign Dealer Insurance Policy (may roll to MT)
    • Exporter Policies: Multi-Buyer or Single-Buyer
  • 27. Small Business Multi-Buyer Policy
    • Coverage:
      • No 95% commercial and 95% political
    • Exporter must qualify as “small business” by SBA definition, and:
      • No more than $5 million in export credit sales over the past 2 years
    • 1 year successful operating history
  • 28. Small Business Multi-Buyer Policy
    • Must insure ALL export credit sales (L/C, CIA, CAD, SDDP sales may excluded)
    • Refundable advance premium: $500
    • No deductible, no application fee, “pay-as-you-ship”, no minimum premium requirement
  • 29. Small Business Multi-Buyer Premium Rates (example) Per $100. of the gross invoice amount 25% rate reduction if used with Ex-Im/SBA Working Capital Guarantee product! $2.08 $0. 77 $0. 62 271-360 $1.70 $0. 63 $0. 51 181-270 $1.35 $0. 50 $0. 41 121-180 $1.06 $0. 39 $0. 32 61-120 $0.65 $0. 24 $0. 19 1-60 days N/A $0.04 $0.04 Sight L/Cs Private Financial Institutions Sovereign Term
  • 30. Standard Multi-Buyer Policy
    • For experienced exporters with over 500 employees and /or $5mm in annual export credit sales
    • Must insure ALL export credit sales (L/C, CIA, CAD, SDDP may be excluded)
      • On a case-by-case basis, exporter may request to exclude certain buyers (“Reasonable Spread of Risk”)
  • 31. Standard Multi-Buyer Policy
    • Coverage:
      • 95% for both commercial and political risks
    • Buyer credit limits endorsed to policy (requires minimal pre-approvals by Ex-Im Bank)
    • No minimum premium, “pay-as-you-ship”
  • 32. Success Story: Pharmaceutical Trade Services, Inc.
    • Challenge: Exporter of specialized prescription drugs needed to extend competitive credit terms to get larger orders
    • Solution: The company used the small business multi-buyer policy as a marketing tool to extend net 45 day terms and increase sales
    • Result: The company’s export sales volume increased over a 7 year period from $713,000 to nearly $6 million, and the staff grew to 15 employees
  • 33. Single Buyer Insurance Policy
    • Buyer-specific policy
    • Insures a single sale or multiple sales to one buyer
    • 90% coverage, both commercial and political; 95% for letters of credit
    • Maximum policy period: 1 year
    • No deductible, No application fee
  • 34. Single Buyer Insurance Policy (con’t.)
    • Premium based on country and length of credit terms (see rates on www.exim.gov )
    • Charged on sales volume (not credit limit)
    • Pay-as-you-ship
    • Reduced minimum premium for “small business” exporters
  • 35. Single-Buyer Rates (private sector) (example) Per $100 of the gross invoice amount $1.35 $1.06 $0.65 $0.04 Thailand $2.20 $1.72 $1.05 $0.09 Turkey $1.00 $0.79 $0.48 $0.03 U.A.E. $1.76 $1.38 $0.84 $0.07 Brazil $1.00 $0.79 $0.48 $0.03 Mexico 121-180 days 61-120 days Up to 60 days Sight L/C Country
  • 36. Post-Export Financing Solutions: When a Foreign Buyer Needs Medium-Term or Long-Term Financing
  • 37. Medium-Term Insurance and Guarantees
    • Capital equipment sales and related services
    • Lease transactions
      • Finance Lease: Insurance or Guarantee
      • Operating Lease: Insurance only
    • Used equipment OK up to 3 year terms
    • Buyer criteria per Medium-Term Credit Standards
      • Minimum 3 year history
      • Reliable financial statements ( audited if credit exceeds $1 million)
      • Buyer must meet certain financial ratios
  • 38. Medium-Term Insurance and Guarantees
    • 15% downpayment required (may be financed by the lender)
    • 100% coverage of the remaining 85% on both principal and interest on loans made by lenders directly to foreign buyers or on credit terms extended to foreign buyers by exporters
    • 1 to 5 year repayment, exceptionally 7 years and < $10 million
    • Generally limited to buyers in developing markets
  • 39. Medium-Term Insurance & Guarantees: Pricing Indications (example) Private-sector, corporate borrowers, 5 year tenor, for transactions under $10 million
    • Refer to “ Fee Calculator ” on www.exim.gov
    • One-time (flat) fee (may be financed)
    • Under Guarantee program, a 0.125% p.a. commitment fee applies (accrues 60-days from approval date)
    3.19% 3.14% Russia 4.76 % 4.69% Brazil 1.94 % 1.92 % Mexico Guarantee Exposure Fee Insurance Premium Country
  • 40. Long-Term Financing Support
    • Generally used for buyer financing in amounts over $10 million and 7 to12 year repayment terms
    • Generally, large-ticket items (aircraft) and project finance receive long-term support
    • 15% down payment / Ex-Im Bank supports 100% of the remaining 85% (the financed amount)
        • Loan Guarantees
        • Direct Loans
  • 41. Success Story: PowerLight Corporation
    • Challenge: Designer/operator of grid-connected solar power systems needed to provide equipment and services for a Korean project, and arrange attractive financing for the buyer
    • Solution: A $7.8 million Ex-Im Bank medium-term loan guarantee was put in place. The lender was City National Bank of Los Angeles
    • Result: PowerLight was the first exporter to benefit from the new 15-year repayment terms available to support U.S. exports for renewable energy, water and hydroelectric power projects
  • 42. Success Story: Le Tourneau Technologies, Inc.
    • Challenge: To provide competitive financing to construct a mobile offshore oil and gas exploration and drilling rig in Mexico
    • Solution: A $54 million long-term Ex-Im Bank guarantee (8.5 years) was issued to the lender, BBVA Bancomer of Mexico City. Such a loan was not available without Ex-Im Bank’s support
    • Result: With the guarantee in place, Le Tourneau won this $129 million contract over its competitors
  • 43. Ex-Im Bank OnLine
    • Our new, web-based application and transaction management system makes it easier for exporters and lenders to use Ex-Im Bank products
    • Automation of our primary business processes, particularly for those most used by small businesses:
      • All exporter insurance policies (ST and MT)
      • Lender policies for ST and MT buyer credits, letters of credit, foreign dealer policy
      • MT guarantees under $10 million
  • 44. “ How Can We Help YOU?”
    • Expand international sales
    • Boost borrowing power
    • Speed cash flow
    • Enter new markets
    • Mitigate risks and losses
  • 45. Ex-Im Bank Partners
    • Additional resources and assistance in applying for Ex-Im Bank products are available from:
      • Insurance Brokers (see list on www.exim.gov )
      • City/State Partners (see list on www.exim.gov )
      • Delegated Lenders (see list on www.exim.gov )
      • US Export Assistance Centers (USDOC and SBA)
  • 46. For More Information
    • Call the Ex-Im Bank Regional Office near you:
      • New York: 212-809-2650 (Northeast / Mid-Atlantic)
      • Chicago: 312-353-8081 (Midwest)
      • Miami: 305-526-7436 (Southeast)
      • Houston: 281-721-0470 (Southwest)
      • Newport Beach: 562-980-4580 (West)
        • San Francisco: 415-705-2285
        • San Diego: 619-557-7091
    • 800-565-3946 [exim]
    • Web Site: www.exim.gov