Ben Kaufman Sales Company is a small business in Miami, FL, that distributes printed towels and apparel to countries throughout the Caribbean. The business is extremely competitive and price is the primary buying criteria. Exports account for approximately 20 percent of the company’s business and international sales are growing.
Like many small businesses, the executives at Ben Kaufman Sales were hesitant to take risks that could have a significant negative impact on the company’s operations. Working with EXIM Bank gave the team peace of mind to expand into riskier international markets while protecting its assets and employees from the potential outcomes of an international business deal gone sour.
As a small business, the company needs to borrow against its receivables for two reasons: to expand into new markets and to manage the seasonal nature of its sales. At the same time, Kaufman needed to mitigate the risk of not being able to collect from our international customers.
Without EXIM Bank, the company would still export, but to just a few customers who they knew would pay within 30 days. That really limits the number of companies they can sell to. With export credit insurance from EXIM, 95 percent of its shipment is covered in case of financial default by one of its international customers. This has allowed the company to expand our business into new markets while at the same time.
EXIM insurance also expands the company’s borrowing base. With export credit insurance, Kaufman’s bank will loan it funds on their foreign receivables, which is key to growing a business. Without having the ability to borrow against receivables, the company could not survive in this business.
The controller at the time believed it is imperative for a small company to work with EXIM Bank. He cited it is a simple process and did not take up much of his time. He also stated EXIM staff is easy to work with and they only pay for credit insurance when the company uses it to cover exports.