Community Lender Enhancement Initiative
The Community Lender Enhancement Initiative (CLEI) is a specialized component of EXIM's Working Capital Guarantee Program designed to help community banks and other smaller lenders participate in export finance. The initiative reduces operational complexity and streamlines participation so lenders can support small business exporters without developing extensive export finance infrastructure. Based on the loan structure, EXIM may assume responsibility for collateral monitoring and reduce certain administrative requirements, making export financing more accessible and cost-effective for participating lenders.
Through CLEI, community lenders can expand lending opportunities, support small-dollar export transactions, and help more U.S. businesses access the working capital needed to compete in international markets.
Interested in participating? Learn more about the initiative and available resources through EXIM's Community Lender Enhancement Initiative page.
Key Benefits of CLEI
- Reduced operational burden for participating lenders
- Streamlined collateral monitoring processes
- Greater ability to support small-dollar export transactions
- Expanded access to export finance for rural and underserved markets
- Lower barriers to entering export finance
- Ability to grow export-related lending portfolios while managing risk through EXIM support
Who Should Consider CLEI?
CLEI may be particularly relevant for:
- Community banks
- Regional financial institutions
- Lenders seeking to expand business lending through export finance
- Institutions interested in supporting small business exporters
- Lenders that do not maintain dedicated export finance or asset-based lending team
How CLEI Simplifies Participation
| Traditional Export Finance Participation | CLEI Approach |
|---|---|
| Lender responsible for collateral monitoring | EXIM may assume collateral monitoring responsibilities |
| Higher operational requirements | Streamlined processes for participating lenders |
| Greater resource commitment | Reduced administrative burden |
| More difficult to serve smaller export transactions | Better suited for small-dollar export lending opportunities |
Community Lender Resources
- An Exporter’s Guide to Working Capital Loan Guarantees (link is external)
- Working Capital Guarantee: How it Works Video (link is external)
- Working Capital Case Study (link is external)
- Community Lender Enhancement Initiative Flyer
- EXIM Product Selection Guide (link is external)
Resources
- Forms
- see also Pre-Application Information below
Pre-Application Information
Eligibility
Borrowers must:
- Export U.S. goods and/or services (see content policy)
- Be domiciled in the U.S.; Ownership by foreign nationals or entities is acceptable.
- Have a positive net-worth and an operating history of at least one year.
The Additionality Test - Why is Ex-Im's Guarantee Necessary?
EXIM provides guarantees when support from the private sector is unavailable and the export sales supported would not otherwise proceed. The Additionality Test is a set of questions determining the necessity of EXIM's involvement in the transaction. Below are three questions that should be addressed in the lender's credit memorandum:
- Why the borrower does not have enough internally generated working capital to support the export sale
- E.g., large contract size, expanding sales volume, seasonal cash flow, slow-turning receivables, high levels of work-in-process and/or inventory, bonding requirements
- Why the funds are not available from "external sources"
- That is, why can't financing be obtained from other sources such as majority owners or capital markets?
- Why the EXIM guarantee is needed for your institution to provide the funding
- E.g., regulatory or credit policies, issues with the borrower's creditworthiness, market uncertainty
Goods and services must be exported from the United States: EXIM does not provide support for content shipped from foreign ports.
Export destinations must not be restricted countries: EXIM can support exports to most markets. There are some export destinations, however, that are not eligible for support. EXIM's Country Limitation Schedule provides an up-to-date listing of approved countries.
Exports must be non-military in nature: EXIM is prohibited from financing exports of defense articles and services. There are exceptions for "dual use" items (that is, items used for both military and commercial or civilian applications).
Allowable Use of Funds
Under the program, funds may be used for the following export-related activities:
- To acquire inventory or purchased finished products for export
- To pay for direct and indirect costs related to export contract
- Examples: labor, overhead, design, engineering
- To support Standby Letters of Credit serving as bid bonds, performance bonds or payment guarantees; to support Warranty Letters of Credit; to support Commercial Letters of Credit benefitting U.S. suppliers.
Advance Rates and Collateral Eligibility
Accounts Receivable
Advance Rates: Clients can borrow against their export-related accounts receivable at advance rates of up to 90%. Advance rates may be lower, depending on the quality of the receivables. Advance rates may be up to 70% for accounts receivable due to a foreign affiliate or subsidiary of the borrower; in such cases, prior EXIM approval is required.
Eligibility: For accounts receivable to be included in the borrowing base, the terms of sale must not exceed 180 days. Receivables may not be more than 60 days past due if on open account or 90 days past due if insured.
Inventory
Advance Rates: Clients can borrow against their export-related inventory at advance rates of up to 75%, depending on inventory quality. Advance rates may be up to 60% for inventory located outside the U.S.; in such cases, prior EXIM approval is required.
Eligibility: Export-related raw materials, work-in-process, and finished goods are eligible for inclusion in the borrowing base. Inventory must be located within the U.S., unless pre-approved by EXIM. Inventory must be valued at the lower of actual cost or market value.