Used and Refurbished Equipment
Equipment that has been previously owned or placed into service is generally eligible for support under EXIM Bank's loan, guarantee and insurance programs, provided certain criteria are met. To be eligible for EXIM Bank support, used equipment, including equipment that has been refurbished in the U.S., must meet the following eligibility criteria:
- To be considered U.S. content, the used equipment must be of original U.S. manufacture, AND, if previously exported, must have been in use in the U.S. for at least one year following return to the U.S. and prior to the proposed re-export.
- The U.S. costs associated with the refurbishment of the equipment are eligible for EXIM Bank support, provided they meet EXIM Bank's content policy parameters. EXIM Bank can support the lesser of 85 percent of the U.S. Contract Price of the item or 100% of the actual U.S. content of the item provided that the item is shipped from the U.S.
- If the used equipment is of either original foreign manufacture or original U.S. manufacture, previously exported and has not been in use in the U.S. for at least one year prior to its proposed export, then EXIM Bank will treat it as foreign content and the following applies:
- If the equipment is to be refurbished, the used equipment procurement cost is considered eligible foreign content provided that this cost is less than 50% of the total procurement and refurbishment cost.
- If the foreign content of the used equipment exceeds 50 % of the cost associated with the procurement and refurbishment of the equipment, then only the U.S. refurbishment portion will be considered eligible for EXIM Bank support.
- Previously exported goods that benefited from EXIM Bank financing in the past will be considered eligible for EXIM Bank support provided that the original financing has been paid in full and that the equipment has been in use in the U.S. for at least one year.
- The repayment term that EXIM Bank offers for used and refurbished equipment will be consistent with EXIM Bank's international agreements for repayment terms based on contract value, and shall not exceed the effective remaining useful life of the transaction's scope of supply. EXIM Bank, at its sole discretion, will determine the effective remaining useful life of the scope of supply according to the following:
- The remaining useful life of an individual piece of equipment shall reflect the remaining portion of "first life" expected for a similar piece of new equipment. "First life" is defined as the typical expected operating life of a piece of equipment prior to major overhaul milestones or the need for significant refurbishment.
- If the sale includes more than one item, including a mixture of new and used items, a dollar- weighted average of the individual useful lives of each of the items in the scope of supply will be calculated.
- Foreign Content for used pieces should be determined by contacting the original manufacturer to ascertain the value on a percentage basis of foreign components contained in the equipment during the manufacturing process. This percentage should be applied to the suppliers purchase price to determine the current value of foreign components. This value should then be adjusted to account for the value of any additional foreign components installed during the refurbishment process.
Applicants seeking EXIM Bank support for used or refurbished equipment are required to submit a completed Used Equipment Questionnaire for each used item (eib11-03.pdf). The information presented will be considered in the overall evaluation of the transaction, including EXIM Bank's determination of the appropriate term for the transaction. If you have any questions, please call EXIM Bank's Engineering and Environment Division on (202) 565-3570 or the Business Development Group on (202) 565-3946.