Export Sales Will Support Jobs in Maine, Pennsylvania, and New Jersey
FOR IMMEDIATE RELEASE April 28, 2011
Phil Cogan or Linda Formella (202) 565-3200
WASHINGTON, D.C.-Two small-business exporters in Maine and New Jersey are among the first to increase foreign sales and expand into new country markets with the help of the innovative Express Insurance product from the Export-Import Bank of the United States (Ex-Im Bank).
Express Insurance has been developed for qualified small businesses; it features a streamlined application and both a policy quotation and two foreign-buyer credit indications up to $300,000 within five business days.
A big concern for small businesses beginning or expanding exports is whether they will get paid by buyers in distant and unfamiliar markets. To be competitive, they also need to be able to offer financing terms to foreign buyers. Ex-Im Bank's insurance policy substantially covers the nonpayment risk and gives exporters the ability to offer financing for short-term exports - and our new Express product enables them to insure those sales in one business week, said Ex-Im Bank Chairman Fred P. Hochberg.
One of the first companies to benefit from the Bank's Express Insurance is FHC Inc., a small-business based in Bowdoin, Maine, that researches, develops and manufactures microelectrodes for medical recording. The company has approximately 85 employees, mainly in Bowdoin and in Greenville, Pa. This first-time Ex-Im user is now insuring its exports to buyers in Argentina, Chile, South Africa and Italy.
Initially, I thought that the main advantage was the ability to offer 60-to-90-day terms without the fear that we could be losing a $100,000 piece of equipment. But since we started with Ex-Im's Express Insurance, our export business has kind of exploded with sales opening up in countries and a continent where we had never done business before. The opportunities are limitless for us, said Scott Humphrey, FHC chief financial officer. We anticipate adding jobs when we exceed our present capacity to handle the new demand.
Insurance broker, Trade Acceptance Group (TAG) of Edina, Minn. introduced FHC to Ex-Im Bank after the broker received a U.S. supplier referral request from an Argentine customer. TAG then introduced Heca Group, S.A. of Buenos Aires to FHC and suggested that Ex-Im Bank might help them transact sales.
I called FHC about Ex-Im's Express Insurance, and I told them, 'This is exactly what you're looking for - the entire process from application to buyer approvals can be accomplished in five days,' explained TAG's Curt Hanson. The streamlined process and the turnaround speed made it very attractive to FHC.
The Gluefast Company Inc. in Neptune, N.J., is another small business that is increasing its exports through the Bank's Express Insurance. It is a 70-year old family-owned manufacturer of adhesive application and dispensing equipment, gluing machines and adhesives for the packaging, graphics, converting and picture-framing industries. The company has approximately 12 employees at its Neptune facility.
Gluefast received a buyer approval for $250,000 of insurance coverage for a distributor in Mexico.
The company learned about Ex-Im's Express Insurance from Tom Motley, the Trenton, N.J., regional officer of the U.S. Department of Commerce, who put Gluefast in touch with broker Stu Schechter of The Credit Insurance Source in Matawan, N.J.
Our best growth is coming from exports, said Gluefast's Lester Mallet. Initially I wanted coverage to make sure that we were protected against a loss in the event our distributor in Mexico defaulted on payment, but I am excited about the prospect of offering terms to our foreign customers. This will definitely help our export efforts.
For more information on Express Insurance contact your company's insurance broker or see the Express Insurance page for product details and contact information.
Ex-Im Bank is an independent federal agency that helps create and maintain American jobs by filling gaps in private-sector export financing at no cost to American taxpayers. The Bank provides a variety of financing products, including working capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. capital goods and services.
By charging fees and interest on all loan-related transactions, Ex-Im Bank is self-sustaining and is able to cover all operation costs and potential losses while also producing revenue. The Bank has generated $3.4 billion for U.S. taxpayers over the past five years.
In fiscal year 2010, Ex-Im Bank authorized a record high of approximately $24.5 billion in loans, guarantees and insurance (including more than $5 billion in authorizations for small businesses), supporting an estimated 230,000 American jobs. In the first quarter of fiscal year 2011, the Bank approved $8 billion in total financing authorizations, supporting nearly $9.3 billion in U.S. export sales and approximately 66,000 American jobs. For more information, visit Ex-Im Bank's Web site at www.exim.gov.