"Made in the USA" is a mark of quality recognized worldwide, but extending credit to buyers and accessing working capital are major barriers to global growth for many manufacturers.
Fortunately, there is a solution.
The Export-Import Bank of the United States (EXIM) helps American manufacturing companies overcome these obstacles by providing financing options to address gaps in commercial lending. EXIM is a federal government agency that enables U.S. businesses of all sizes to win and grow their international sales in more than 180 countries.
EXIM is a critical tool for U.S. manufacturers to remain competitive in a tough and challenging global economy. Manufacturers comprise half of EXIM's customer base (in terms of total export support). More than 90 percent of EXIM's transactions directly support small businesses. No deal is too small.
EXIM Support for U.S. Manufacturers is Extensive!
Provide open account credit terms - Payment in advance deters sales because it adversely affects the buyer's cash flow. Foreign buyers expect credit (net 30, net 60, etc.). With EXIM support, U.S. manufacturers can confidently provide payment terms of up to 180 days.
Protect against buyer nonpayment - EXIM's export credit insurance reduces the risk of not getting paid due to commercial (e.g., bankruptcy) and political risks (e.g., war). If your buyer doesn't pay, EXIM could pay you up to 95 percent of your invoice.
Expand your borrowing capacity - You can assign your EXIM-insured foreign receivables to a lender, improving your company's liquidity and easing cash flow constraints.
Access vital export funding - EXIM provides a 90 percent loan guarantee that encourages lenders to provide credit to manufacturers. The funds can be used to fulfill sales orders as well as cover labor and overhead costs. EXIM can also help your bank set up standby letters of credit to be used as performance or bid bonds.
Assist buyers to obtain term financing - EXIM's loan guarantee gives lenders the assurance to provide loans to foreign buyers for purchasing U.S. capital goods and related services. With this support, the exporter gets paid in full upon shipment. The buyer can typically obtain lower interest rates and longer repayment terms.
Competitive Engineering Inc. (CEI) - Tucson, Arizona
CEI is a small business manufacturer of precision machine components for a variety of customers, particularly in the aerospace and data-storage industries. The company has a staff of 55 employees, mostly based in Tucson. Exports account for approximately 40 percent of CEI's revenues.
In 2005, the company turned to EXIM's working capital loan guarantee to find a lender that would include foreign accounts receivable as collateral in its borrowing base. To fulfill export orders and maintain its cash flow, CEI currently benefits from EXIM's guarantee of a $2.5 million line of credit from its lender, GBC International Bank, in City of Industry, California.
CEI uses the EXIM-guaranteed working capital to cover inventory and purchases of materials, and to maintain cash flow while awaiting payments of foreign accounts receivable. This capacity has enabled CEI to sustain exports to major buyers in Mexico and the Philippines as well as to remain competitive.
Over the past five years, EXIM has supported more than $55 million of CEI's exports. The company has added 10 new positions in the past two years. Exports now account for 40 percent of the company's sales.
"Exports constitute a significant portion of our business, and we need our foreign accounts receivable to be included as collateral. EXIM's program has given us access to the working capital we need to sustain our exports and the jobs of our hard-working employees."
- Don Martin, President
Boost your sales while protecting your cash flow.
Contact EXIM's export finance regional directors at 800.565.3946 (EXIM) to enable your company win and grow its sales worldwide. They will answer your questions and expedite the application process.