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EXIM Helps Increase Arizona Company's Line of Credit

Exporter/Customer: 
Competitive Engineering Inc.
Export Destinations: 
Mexico and the Philippines
EXIM Bank Product: 
Working Capital Loan Guarantee
Export Sales: 
40 percent of total sales
Jobs Created: 
10
Jobs Supported: 
55

CEI

Competitive Engineering Inc. (CEI) is a small business manufacturer of precision-machine components for a variety of customers, particularly in the aerospace and data-storage industries.  Based in Tucson, Arizona, CEI provides engineering and manufacturing solutions to a diverse world market.  The company is owned by Don and Charlotte Martin and has a staff of 73 employees in the United States, mostly based in Tucson. 

EXPORT CHALLENGE

Exporting provides many challenges to small businesses who may not have the working capital to support sales. Cash flow, a crucial aspect for small businesses like CEI, are jeopardized by when they cannot fulfill an order. CEI could not find commercial lenders that were willing to include uninsured foreign accounts receivable in the company’s borrowing base to maximize its line of credit.

EXIM SOLUTION

In 2005, the company turned to EXIM’s working capital loan guarantee to include foreign accounts receivable as collateral in its borrowing base.  EXIM’s guarantees enable U.S. exporters, mainly small and medium-sized businesses, to obtain working capital loans from qualified commercial lenders, based on inventory and foreign accounts receivable. EXIM assumes 90 percent of the loan risk with the lender covering the remaining 10 percent.

To fulfill export orders and maintain cash flow, CEI currently benefits from EXIM’s working capital loan guarantee of a $2.2 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 from its buyers.

RESULTS

The funds have enabled CEI to sustain exports to major buyers in Mexico and the Philippines and to remain competitive.  Over the past five years, EXIM has helped to support nearly $55 million of CEI’s exports.  The company has been able to increase revenue and sustain and create jobs. CEI 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