Mathews Company is a family-owned manufacturing firm located in Crystal Lake, Illinois. It makes high-quality dryers that remove moisture from grain, allowing it to be safely stored in silos. Grain dryers are especially large pieces of equipment, consisting of 10-, 12- and 18-foot diameter bases and towering structures that stand alongside silos.
It takes three to six months for a dryer to arrive and be installed. Mathews customer do not want to pay in advance. On the other end, Mathews wants to make sure they get paid, especially since these dryers are custom build and cannot be resold.
EXIM’s export credit insurance assure that companies receive payment for its projects and also makes commercial lenders become more comfortable extending a line of credit. When asked, “Why don’t you use the private market?” Sales and Marketing Manager Jeremy Kemp responds, “We’ve talked to bankers for export financing, and they told us that EXIM is our option. EXIM allows us to bridge cash flow issues we’ve had with customers in Mexico and other countries. We wouldn’t have been able to sell five grain dryers to Mexico last year. That doesn’t sound like much, but that’s 2.5% of our business … Without EXIM, many U.S. companies will be shut out of overseas markets by foreign businesses with more secure government backing. EXIM fills a void no one else can fill. We’ve looked.”
In one situation, Mathews Company had the opportunity to sell a $328,504 continuous flow grain dryer to a company in Mexico (Almacenameinto de Granos y Semillas) but the buyer needed term-financing beyond one year. EXIM's medium-term export credit insurance policy played a key role by supporting the company's sale. While protecting the Matthews Company from buyer nonpayment, the buyer also benefitted by obtaining a longer term to repay the lender for the grain dryer.
Creditworthy foreign buyers seek greater security and better cash utilization. They often consider cash advances, letters of credit, or paying a high down payment to purchase capital equipment or services as unacceptable and simply walk away from the deal.
EXIM has supported the company’s international growth as exports now comprise 40 percent of its sales.