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EXIM Insurance Saves and Creates Jobs at New Jersey Company

Exporter/Customer: 
Hoffman International, Inc.
Export Destinations: 
Worldwide - over 80 countries
EXIM Bank Product: 
Export Credit Insurance, Working Capital Insurance and Lender Guarantees for Buyers
Jobs Created: 
25

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Hoffman International is a third-generation construction equipment company with deep ties to the New York metropolitan area. In 1920 Bill and Harry Hoffman purchased their first truck and founded Hoffman Motor Transportation to deliver roofing material for installers. During the '60s and '70s, the company began expanding internationally by delivering packages for construction projects overseas, so that all the vehicles and machines required for a project could be purchased and shipped from one single source.

EXPORT CHALLENGE

Although exports are a great source of wealth for many small businesses, international sales provide an array of threats to a company's financial health. International distributers often expect to but on open-credit terms; while these can allow a seller to be more competitive, global customers do not always pay on time for the products they bought. This results in a loss of working capital for the U.S. -based seller.

EXIM SOLUTION

The company has been an EXIM customer since 1996 and attributes most of its export growth to the Bank's financing. Hofffman has utilized all three of EXIM's products! It uses export credit insurance to cover foreign buyer nonpayment and working capital loan guarantees to fulfill its sales orders. For larger capital goods projects, EXIM's medium- and long-term lender loan guarantees have assisted its creditworthy buyers in getting financing.

RESULTS

In one instance during the spring of 2009, Hoffman's export credit insurance agency suddenly cancelled its policy because of the financial crisis, jeopardizing the company's international sales. To address this problem, Hoffman relied on EXIM financing to cover pending transactions and, as a result, protected 15 jobs. Using EXIM's term financing, Hoffman also signed a $50 million deal with a buyer in Cameroon for 151 pieces of equipment; the project supported 55 existing jobs and created 25 new jobs. Hoffman International now exports to 80 countries, focusing on sub-Sahara Africa, the Middle East, Latin America and Russia. Total export sales represent about 20 percent of Hoffman's total sales. of this $80 million major dealer and distributor of large U.S. manufactured equipment. EXIM has supported $47 million of the company's international sales from 2013 to 2018.

"The Bank's insurance gives me peace at night. Financing is critical to our business and EXIM Bank saved the company during the recession. The insurance allowed us to offer credit terms to our customers - that was the competitive edge."
Ms. Musya Tumanyan, Senior Vice President