FOR IMMEDIATE RELEASE November 15, 2009
Marianna Ohe (202-565-3200)
Washington, D.C. - The Export-Import Bank of the United States (Ex-Im Bank) has raised the upper limit of its small business multibuyer export credit insurance policy. This will allow more small businesses to export their goods and services more easily.
U.S. exporters designated as small businesses under Small Business Administration standards, and with annual export credit sales of $7,500,000 or less, now are eligible for enhanced coverage under Ex-Im Bank's short-term small business multibuyer insurance policy. Previously the eligibility ceiling was $5,000,000.
The policy enhancements include: 1) no first loss deductibles, 2) discounted insurance premiums, and 3) the receipt of cost-free, exporter performance risk protection for lenders financing receivables for qualified exporters.
This change is designed to increase U.S. small business exports by expanding the availability of financing to them, said Ex-Im Bank Chairman and President Fred P. Hochberg. Exporting is critical to creating and preserving American jobs, especially while the current global financial crisis is being resolved.
The broadened program eligibility will be effective December 1, 2009 for new small business multibuyer policy applicants. Current Ex-Im Bank multibuyer policyholders who previously were ineligible for coverage enhancements but are eligible under the new ceiling, will be offered conversions to the enhanced policy.
Ex-Im Bank's short-term multibuyer insurance policies protect the exporter's portfolio of export credit risks. These policies are effective tools in helping U.S.exporters to mitigate foreign credit risk, expand their marketing through extension of liberalized selling terms, and promote access to foreign receivable financing.
Over the past year, Ex-Im Bank has launched a number of other initiatives to strengthen support for small business exporters in the face of the economy's tightened liquidity.
For example, the Bank opened its working capital guarantee program to indirect U.S. exporters. Companies that produce goods or services that are sold to U.S. companies, and are subsequently exported, are now eligible to apply for working capital loans guaranteed by Ex-Im Bank.
Also, to support U.S. exports to South Korea, the Bank granted special delegated authority to help meet increased demand to insure U.S. lenders' confirmation of Korean bank letters of credit. Senior Ex-Im Bank officials have been given the authority to approve requests for up to $2.9 billion in insurance cover involving letters of credit issued by 11 Korean financial institutions. The vast majority of U.S. exporters selling to South Korea are small- and medium-sized businesses, according to the U.S. Census Bureau. Similar authorities have been provided by the Bank to support financial institutions in India, Nigeria and Angola, among others.
In fiscal year 2009, Ex-Im Bank achieved its highest financing level since its establishment in 1934, authorizing more than $21 billion in support of U.S. exports. The Bank also set a record for financing of U.S. small business exports at $4.36 billion.
Ex-Im Bank is the official export-credit agency of the United States. The independent, self-sustaining federal agency, now in its 75th year, helps create and maintain U.S. jobs by financing the sale of U.S. exports, primarily to emerging markets throughout the world, by providing loan guarantees, export credit insurance and direct loans.