ExIm Bank U.S. Exporter Product Overview Video Presentation

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Ex-Im Bank U.S. Exporter Product
Overview Video Presentation
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Ex-Im Bank 101

• The Basics

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Who We Are What We Do

• Ex-Im Bank is an independent agency of the United
  States government
• Established in 1934
• Headquartered in Washington, DC
• 5 regional business development offices plus 2
  satellite locations in CA (San Diego and San
  Francisco)
• Mission Support US exports in order to create
  and sustain US jobs

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Ex-Im Bank Regional Offices
New York
San Francisco
Chicago
Newport Beach
San Diego
Houston
Miami
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Eligibility Criteria

• No Defense Articles or Services, or Military
  Buyers
• Exceptions may be made for humanitarian purposes,
  drug interdiction, dual-use items

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Eligibility Criteria

• US Content
• 51 for short-term transactions
• 85 for medium-term transactions
• Services must be performed by US-based personnel,
  either in the US or in the host country

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Eligibility Criteria

• Country Eligibility
• Support available in over 155 countries
• Restrictions may apply for political or economic
  reasons
• Refer to the Country Limitation Schedule (CLS) at
  www.exim.gov on the homepage under Shortcuts

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How We Help Increase Your Export Sales

• Minimize risks
• Level the playing field
• Supplement commercial financing

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Foreign Export Credit Agencies
Your foreign competitors have similar support

• EDC Canada
• ECGD UK
• Coface France
• EulerHermes Germany
• JBIC Japan
• Sace Italy
• KEIC, Keximbank S. Korea
• OeKB Austria
• Efic Australia

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Small Business IS Our Business

• 86 of all Ex-Im Bank transactions supported
  small business exports!
• 90 of total working capital guarantees -- (990
  million)
• 90 of total short-term insurance policies --
  (2.1 billion)
• MT loans and guarantees -- 275 million
• 525 million in working capital guarantees and
  export credit insurance supported exports by
  minority or woman-owned businesses

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FY 2008 at a Glance

• Total Authorizations 12.6 billion
• Major Sectors
• Transportation 4.7 billion
• Environmental 82 million
• Energy 2.0 billion
• Agriculture supported 1 billion in export
  value
• Services supported 1.6 billion in export value

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Trade Terms as a Spectrum of Risk

• Seller Risk Trade Terms Buyer
  Risk
• High
  Low
• Open Account
  
• Cash Against Documents
• Sight Letters of
  Credit
• Usance / Deferred Letters of Credit
• Payment in Advance
• Low High

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Ex-Im Bank Support Covers the
Spectrum
Pre-Export Financing
Post-Export Financing
InsuranceGuaranteesDirect Loans
Working Capital Guarantee
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Pre-Export Financing

• Export Working Capital Guarantee Program

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Working Capital Guarantee (WCG)

• Assists small and mid-size companies in obtaining
  working capital to produce or purchase US goods
  and services for export
• Provides a 90 guarantee of repayment (principal
  and interest) on loans to exporters
• May be set up as Transaction-Specific or a
  Revolving Line of Credit

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Working Capital Guarantee

• No minimum or maximum amounts
• Loan supports advances made against
  export-related inventory (including WIP) and
  foreign receivables
• Up to 75 advance rate on inventory, and up to
  90 on foreign receivables

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Working Capital Guarantee
Transportation Freight Financing (TFF) Program

• Assists US-based transportation logistics
  providers in obtaining working capital to
  facilitate the export of commercial cargo on
  US-flag ships
• Uses accounts receivable as collateral for the
  loan

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Working Capital Guarantee
Transportation Freight Financing (TFF) Program

• Funds may be used to provide services directly
  related to the logistics involved in the export
  of commercial cargo such as
• Ocean, air, rail and truck freight
• Cargo and marine insurance
• Crating and packing
• Port drayage warehousing
• Terminal, forwarder and broker fees

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Working Capital Guarantee

• Asset-Based fully collateralized
• Personal guarantees are required of owner(s)
• Cost
• 100 application fee
• Up to 1.5 facility fee Reduced fee if
• Exports sales structured under L/Cs and/or
  secured by export credit insurance exporters
  financial ratios are within its industry median
• A lower fee may be negotiated with a Delegated
  Authority Lender (see list on www.exim.gov)
• Interest rate is determined by the lender

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WCG Increases Borrowing Power
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Success Story Callidus Technologies LLC

• Challenge Small business, environmental
  engineering firm needed cash to open stand-by
  L/Cs (performance bonds) with the buyer as
  beneficiary during production of the equipment.
• Solution Lender funded a 5mm Ex-Im Bank
  guaranteed working capital line of credit, with
  the exporter collateralizing only 25 of the
  stand-by L/C amount.
• Result The firm was able to accept one of the
  largest orders (16 million) in its history, and
  added 70 new employees.

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Post-Export Financing

• Short-TermExport Credit Insurance

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Short-Term Export Credit Insurance

• Protects U.S. exporters against non-payment by
  foreign buyers due to
• Commercial Risks
• Political Risks
• Allows exporters to offer competitive credit
  terms to foreign buyers
• Generally up to 180 days, some products may
  qualify for 360 day terms
• Obtain additional financing
• Insured foreign receivables may be added to your
  borrowing base by assignment of policy proceeds
  (claim payments) to lender

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Risks Covered

• Commercial Risks
• Insolvency
• Bankruptcy
• Protracted default

• Political Risks
• Transfer risk
• War, revolution, insurrection, expropriation
• Cancellation of an import or export license

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Short-Term Export Credit Insurance

• Coverage
• Up to 180 days, exceptionally 360 days (for
  capital equipment and bulk, unprocessed
  agricultural products)
• Commercial and political risks

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Short-Term Export Credit Insurance

• Lender Policies
• Bank Letter of Credit
• Financial Institution Buyer Credit
• Financial Institution Supplier Credit
• Foreign Dealer Insurance Policy (may roll to MT)
• Exporter Policies Multi-Buyer or Single-Buyer

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Small Business Multi-Buyer Policy

• Coverage
• No 95 commercial and 95 political
• Exporter must qualify as small business by SBA
  definition, and
• No more than 5 million in export credit sales
  over the past 2 years
• 1 year successful operating history

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Small Business Multi-Buyer Policy

• Must insure ALL export credit sales (L/C, CIA,
  CAD, SDDP sales may excluded)
• Refundable advance premium 500
• No deductible, no application fee,
  pay-as-you-ship, no minimum premium requirement

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Small Business Multi-Buyer Premium Rates
(example)

• Per 100. of the gross invoice amount25 rate
  reduction if used with Ex-Im/SBA Working Capital
  Guarantee product!

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Standard Multi-Buyer Policy

• For experienced exporters with over 500 employees
  and /or 5mm in annual export credit sales
• Must insure ALL export credit sales(L/C, CIA,
  CAD, SDDP may be excluded)
• On a case-by-case basis, exporter may request to
  exclude certain buyers (Reasonable Spread of
  Risk)

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Standard Multi-Buyer Policy

• Coverage
• 95 for both commercial and political risks
• Buyer credit limits endorsed to policy (requires
  minimal pre-approvals by Ex-Im Bank)
• No minimum premium, pay-as-you-ship

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Success Story
Pharmaceutical Trade Services, Inc.

• Challenge Exporter of specialized prescription
  drugs needed to extend competitive credit terms
  to get larger orders
• Solution The company used the small business
  multi-buyer policy as a marketing tool to extend
  net 45 day terms and increase sales
• Result The companys export sales volume
  increased over a 7 year period from 713,000 to
  nearly 6 million, and the staff grew to 15
  employees

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Single Buyer Insurance Policy

• Buyer-specific policy
• Insures a single sale or multiple sales to one
  buyer
• 90 coverage, both commercial and political 95
  for letters of credit
• Maximum policy period 1 year
• No deductible, No application fee

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Single Buyer Insurance Policy (cont.)

• Premium based on country and length of credit
  terms (see rates on www.exim.gov)
• Charged on sales volume (not credit limit)
• Pay-as-you-ship
• Reduced minimum premium for small business
  exporters

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Single-Buyer Rates (private sector)(example)
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Post-Export Financing Solutions

• When a Foreign Buyer Needs Medium-Term or
  Long-Term Financing

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Medium-Term Insurance and Guarantees

• Capital equipment sales and related services
• Lease transactions
• Finance Lease Insurance or Guarantee
• Operating Lease Insurance only
• Used equipment OK up to 3 year terms
• Buyer criteria per Medium-Term Credit Standards
• Minimum 3 year history
• Reliable financial statements (audited if credit
  exceeds 1 million)
• Buyer must meet certain financial ratios

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Medium-Term Insurance and Guarantees

• 15 downpayment required (may be financed by the
  lender)
• 100 coverage of the remaining 85 on both
  principal and interest on loans made by lenders
  directly to foreign buyers or on credit terms
  extended to foreign buyers by exporters
• 1 to 5 year repayment, exceptionally 7 years and
  
• Generally limited to buyers in developing markets

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Medium-Term Insurance GuaranteesPricing
Indications (example)
Private-sector, corporate borrowers, 5 year
tenor, for transactions under 10 million

• Refer to Fee Calculator on www.exim.gov
• One-time (flat) fee (may be financed)
• Under Guarantee program, a 0.125 p.a.
  commitment fee applies (accrues 60-days from
  approval date)

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Long-Term Financing Support

• Generally used for buyer financing in amounts
  over 10 million and 7 to12 year repayment terms
• Generally, large-ticket items (aircraft) and
  project finance receive long-term support
• 15 down payment / Ex-Im Bank supports 100 of
  the remaining 85 (the financed amount)
• Loan Guarantees
• Direct Loans

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Success Story PowerLight Corporation

• Challenge Designer/operator of grid-connected
  solar power systems needed to provide equipment
  and services for a Korean project, and arrange
  attractive financing for the buyer
• Solution A 7.8 million Ex-Im Bank medium-term
  loan guarantee was put in place. The lender was
  City National Bank of Los Angeles
• Result PowerLight was the first exporter to
  benefit from the new 15-year repayment terms
  available to support U.S. exports for renewable
  energy, water and hydroelectric power projects

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Success Story Le Tourneau Technologies, Inc.

• Challenge To provide competitive financing to
  construct a mobile offshore oil and gas
  exploration and drilling rig in Mexico
• Solution A 54 million long-term Ex-Im Bank
  guarantee (8.5 years) was issued to the lender,
  BBVA Bancomer of Mexico City. Such a loan was not
  available without Ex-Im Banks support
• Result With the guarantee in place, Le Tourneau
  won this 129 million contract over its
  competitors

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Ex-Im Bank OnLine

• Our new, web-based application and transaction
  management system makes it easier for exporters
  and lenders to use Ex-Im Bank products
• Automation of our primary business processes,
  particularly for those most used by small
  businesses
• All exporter insurance policies (ST and MT)
• Lender policies for ST and MT buyer credits,
  letters of credit, foreign dealer policy
• MT guarantees under 10 million

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How Can We Help YOU?

• Expand international sales
• Boost borrowing power
• Speed cash flow
• Enter new markets
• Mitigate risks and losses

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Ex-Im Bank Partners

• Additional resources and assistance in
  applying for Ex-Im Bank products areavailable
  from
• Insurance Brokers (see list on www.exim.gov)
• City/State Partners (see list on
  www.exim.gov)
• Delegated Lenders (see list on www.exim.gov)
• US Export Assistance Centers (USDOC and SBA)

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For More Information

• Call the Ex-Im Bank Regional Office near you
• New York 212-809-2650 (Northeast /
  Mid-Atlantic)
• Chicago 312-353-8081 (Midwest)
• Miami 305-526-7436
  (Southeast)
• Houston 281-721-0470 (Southwest)
• Newport Beach 562-980-4580 (West)
• San Francisco 415-705-2285
• San Diego 619-557-7091
• 800-565-3946 exim
• Web Site www.exim.gov