I was wondering if any member is familiar or has had dealings with Export-Import Bank of the US. This gov't agency claims to assist in reducing credit
Anyone familiar with Export-Import Bank of the US
Answers
EXIM bank will provide Credit Insurance for your export sales, but you have to pay for it. The insurance rates vary depending upon the country, but they vary from 0.5% to 1.0% of the invoice total, so it's pretty affordable. Private insurance companies will do this too, but EXIM bank seems to be more affordable if you're starting off slow and with less than $5M of insurable receivables.
There are some monthly reporting requirements, but those are not overly difficult to comply with.
We've found EX-IM an excellent help in growing our export business. Very simple reporting and payment via a web portal. No hesitation about recommending.
I've used most of ExIm Bank's programs over the years and they are a valuable resource for credit enhancement. I would caution you to be prepared for the time it takes to get a transaction approved unless you have a very capable broker that is experienced in the type of business that you have.
You need or be sure that you have enough US content in your product to qualify as the purpose of the program is to support US jobs.
I agree with Joan's comment on US content. Make sure you have good documentation on the source of all of the components being sold. This became a challenge for us when we were selling a product that included both hardware and software.
Thanks to all for taking the time out of your busy day to provide your feedback. It is very helpful. I appreciate it.
David
EXIM was set up to reduce our trade deficit by supporting exports of US goods and services. If you are interested in using an EXIM guaranty, find a bank that provides export financing. Most banks cannot use foreign receivables as collateral (since you can't perfect a lien in another country). However, an EXIM guaranty will allow the bank to accept the A/R generated by the sale as eligible collateral. Think of EXIM involvement as an insurance policy for collection of the invoice - they do a great job of researching the 'buyer' and determining their creditworthiness.
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Ricardo -
You said that "you can't perfect a lien in another country".
Is that because that concept of lien doesn't exist or the effort to actually perfect doesn't bring a ROI worth the effort?
Thanks
Good observation by Ricardo! Our bank does include the internationally insured AR in the collateral calculation.
Wayne - first of all apologies for late reply... I had not logged in to Proformative in a while. If you still are wondering - I think it's a bit of combination of both, but technically, the government of a country does not have to recognize an entity that is not formally established within its legal context. Liens exist everywhere. Some countries recognize each other's practices through mutual agreements. But I bet you'd have a tough time and spend a lot of money walking into another country and trying to pick up collateral and take it back...
SBA also offers and export guarantee program - I believe they also insure those receivables in case they cannot be collected on.
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Thank you Mr/Ms Anonymous :)
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