FOR IMMEDIATE RELEASE January 11, 2001
Linda Formella (202) 565-3200
As of February 1, 2001, the Export-Import Bank of the United States (Ex-Im Bank) will implement two changes that will enable more U.S. small businesses to access short-term export credit insurance for their foreign sales: a new short-term pricing system that will reduce premium rates on short-term policies for lower risk transactions, and an increase in the eligibility threshold of the small business policies from $3 million to $5 million in annual credit sales. Short-term export credit insurance (repayment terms generally 180 days or less) is one of Ex-Im Bank's principal products to assist small business exporters because it protects against loss due to buyer default for commercial or political reasons, and also enables companies to obtain export financing more easily because the proceeds of the policy can be assigned to a financial institution.
Coverage enhancements and an overall reduction in premiums can stimulate more U.S. small businesses to pursue opportunities to sell to foreign markets. These changes will broaden availability of Ex-Im Bank's short-term insurance, thereby encouraging exporting, company growth and U.S. job creation, Ex-Im Bank Chairman James A. Harmon said.
The Bank has simplified its short-term insurance pricing system to reflect credit risk more accurately. The new short-term pricing will reduce rates for regular multi-buyer and single buyer policies for sales to lower risk countries. Existing policyholders will also benefit from rate reductions. The modified short-term insurance fees will be available at the country rate tables on Ex-Im Bank's Web site, www.exim.gov
U.S. companies that meet the small business definition of the U.S. Small Business Administration (SBA) and whose annual credit sales do not exceed $5 million will be eligible for coverage enhancements under Ex-Im Bank's short-term multi-buyer and single buyer policies that are designed for small businesses.
Ex-Im Bank is an independent federal agency that helps to sustain U.S. jobs by assisting in the financing of U.S. exports, primarily to developing markets, through loans, loan guarantees and export credit insurance. In FY 2000, Ex-Im Bank helped to finance $15.5 billion of U.S. exports to markets worldwide. The Bank authorized $3.3 billion in export credit insurance, of which $1.5 billion assisted U.S. small businesses in FY 2000. At present, 87% of Ex-Im Bank's policyholders are small businesses.