Increase Your Export Sales... While Minimizing the Risks

1
Increase Your Export Sales... While Minimizing
the Risks!

• Export Credit Insurance

2
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 offices ( plus 2 satellite
  locations)
• Mission Support US exports in order to
  create and sustain US jobs

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Coverage in CAFTA and The DR

• Honduras ,El Salvador, Open for all transactions
  No Restrictions
• Guatemala,Dominican Republic,Costa Rica Open for
  all but DCLs limited to 100,000
• Nicaragua Limited to Bank guaranteed transactions

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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
• 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
• 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 Bank Financing

6
Foreign Export Credit AgenciesYour 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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Maximum Credit Terms (ST)
Product
Maximum Term
Consumables, raw materials
Up to 180 days
Bulk agricultural commodities, consumer
durables
Up to 360 days
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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

• Political Risks
• Transfer risk
• War, revolution, insurrection, expropriation
• Cancellation of an import or export license
• Commercial Risks
• Insolvency
• Bankruptcy
• Protracted default

10
Risks Not Covered

• Disputes of any nature, unless and until they are
  resolved
• Cancellation of a sales contract
• Devaluation of a currency as a political risk

If a default occurs, and the buyer asserts that
it was due to a government devaluation of the
currency, we will view that as a commercial loss
as opposed to a political loss.
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Short-Term Export Credit Insurance

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

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Short-Term Multi-Buyer Policy Parameters

• The policy is issued for a period of one year and
  is renewable annually
• The policy covers all eligible shipments made
  during the policy period
• Coverage begins when the goods are placed en
  route to the buyer
• NO application fees

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Small Business Multi-Buyer Policy

• Coverage 95 commercial and 95 political
• Exporter must qualify as small businessby SBA
  definition, and
• No more than 5 million in export credit sales
  over the past 2 years
• 1 year successful operating history
• 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 Multi-Buyer Business
Premium Rates (as of June 6, 2007)

• Per 100. of the gross invoice
  amount 25 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)
• Coverage
• 95 for both commercial and political risks
• first-loss deductible per policy period
• 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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Qualifying Your Foreign Buyers for SBCL Approval

• To establish a credit limit for a buyer, exporter
  must submit
• lt 50,000 A favorable US written trade reference
  OR 1 current, favorable credit report
• 50,001-150,000 A current, favorable credit
  report and 1 US written trade reference
• 150,000-300,000 A current, favorable credit
  report and 2 favorable US written trade
  references
• gt300,000 A current, favorable credit report, 2
  favorable US written trade references and the
  buyers latest 2 years signed financial
  statements

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Single Buyer Insurance Policy

• Buyer-specific policy
• Insures a single sale or multiple sales to one
  buyer
• Maximum policy period 1 year
• No deductible, No application fee
• Premium based on country and length of credit
  terms (see rates on www.exim.gov)
• Charged on sales volume (not credit limit)

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Single-Buyer Coverage

• Coverage (commercial and political)
  
• 100 forsovereign obligors
• 95 for L/C transactions
• 90 for private sector buyers
• 98 for bulk, unprocessed
  agri-cultural products

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Single Buyer Insurance Policy

• New as of January 1, 2007
• Pay-as-you-ship
• Reduced minimum premium for small business
  exporters - 500.
• This means that many exporters
  will now be able to cost-effectively
  insure smaller transactions

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Single-Buyer Rates (private sector)

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Financing Your Insured Short-Term Receivables

• Approved lenders are willing to advance against
  insured receivables
• Financing insured receivables provides working
  capital for exporter
• For qualifying small businesses, a documentary
  enhanced assignment is available
• Lender obtains documents related to transactions,
  such as
• Copy of invoice
• Export bill of lading
• Purchase order

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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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Ex-Im Bank Partners

• Additional resources and assistance in applying
  for Ex-Im Bank products are
  available 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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How Can We Help YOU?

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

25
Thank You!

• Thomas Cummings
• Regional Director Northeast
• and Mid-Atlantic Regions
• 212 809 2652
• Cell 917-690-2851
• Thomas.Cummings_at_exim.gov