Ex-Im Letter for NMBC Members
Ex-Im Bank Partnering with NMBC to Increase Access to Export Working Capital and Credit Insurance.
According to the Office of the US Trade Representative, 95 % of the world’s consumers are outside of the United States and they represent 75% of the world’s purchasing power–a huge growth opportunity for NMBC businesses. Unfortunately, too few NMBC members are selling their products internationally. Our reasons for avoiding international sales range from fear of nonpayment to lack of working capital.
NMBC is partnering with the Export-Import Bank of the United States (Ex-Im Bank) to help NMBC businesses expand and succeed internationally. We invited Bruce Drossman, Export Finance Manager of Ex-Im Bank, to our headquarters to discuss leveraging two Ex-Im programs that increase small business access to necessary capital and help manage risk: the Working Capital Guarantee Program and Export Credit Insurance.
Below is a brief description of the programs. On our website, www.nmbc.org, are notes from our Q&A session with Drossman, in which he spoke candidly about the elements of a successful application, and an informative article about the programs written by Diony Cespedes , a member of NMBC’s Financial Advisory Committee.
Program details including criteria can be found on Ex-Im Bank’s website, www.exim.gov. If you need help completing the applications, call us at NMBC. The service is free for NMBC members and a nominal charge for non-members.
The Working Capital Guarantee Program (“WCGP”) provides export working capital financing through commercial lenders, guaranteed by Ex-Im Bank. According to http://www.exim.gov, financing can be used for “purchasing finished products for export; paying for raw materials, equipment, supplies, labor and overhead to produce goods and/or provide services for export; covering standby letters of credit serving as bid bonds, performance bonds, or payment guarantees; and financing foreign receivables.”
To increase opportunities for businesses seeking less than $500,000 in working capital, Global Credit Express , a pilot program announced in March 2012, will provide Ex-Im Bank direct-funded export working capital facilities up to $500,000 to qualifying companies under referral from Originating Financial Institutions. Those pilot phase referral banks will be announced soon.
Export Credit Insurance reduces the risk of extending competitive credit terms to foreign buyers by providing up to 95% payment default coverage. These policies provide comprehensive coverage of political and commercial risks.
With Ex-Im Bank’s Express Insurance Policy, if you are new to exporting and your individual buyer exposures are each less than $300,000, Ex-Im Bank will process your online application, make a credit decision on two buyers, and send you a quote within five (5) business days. Transactions over $300,000 take longer.
Please let us know if you have any questions about these programs. We have a team standing by to help. As Fritz-Earle McLymont, Managing Director of the NMBC Global explains, “We recognize the importance of providing the technical assistance and support that is necessary to ensure that each firm develops the capacity to succeed in the global marketplace over the long term, by taking advantage of the current opportunities.”