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Loan Guarantee

Competitive Financing for International Buyers

Ex-Im Bank assists exporters by guaranteeing term financing to creditworthy international buyers, both private and public sector, for purchases of U.S. goods and services. With Ex-Im Bank’s loan guarantee, international buyers are able to obtain competitive term financing from lenders when financing is otherwise not available or there are no economically viable interest rates on terms over one-to-two years.

Benefits:

Enables international buyers to obtain loans from lenders
Covers 100% of commercial and political risks
Flexible financing options and repayment terms
No limits on transaction size
Medium-term and long-term financing available

Eligibility

Ex-Im Bank’s guarantee of a lender’s loan to an international buyer is generally used for financing purchases of U.S. capital equipment and services.

Financing may also be available for:

Refurbished equipment
Software
Certain banking and legal fees (See Financing Fees for Ancillary Services.)
Certain local costs and expenses (See Ex-Im Bank Policies – Local Cost.)

Military or defense items are generally not eligible nor are sales to military buyers (with certain exceptions).

Goods eligible for Ex-Im Bank financing must meet Ex-Im Bank’s foreign content requirements (See Ex-Im Bank Policies – Foreign Content.)

Goods eligible for Ex-Im Bank financing must be shipped from the United States to an international buyer. U.S. flag vessel requirements must be complied with in connection with any guarantee transaction that is (i) over $20 million (excluding Ex-Im Bank Exposure Fee) and/or (ii) with repayment terms in excess of either (A) 7 years or (B) the term permitted under Ex-Im Bank's Environmental Exports Program, Transportation Security Export Program, or Medical Equipment Initiative. (See Ex-Im Bank Policies - Shipping)

Ex-Im Bank can do business in most markets. However, we may be limited or unable to offer financing in certain countries and under certain terms. (See Country Information – Country Limitation Schedule.)

Prior to approving certain transactions, Ex-Im Bank will take into account the economic impact of a particular transaction (see Ex-Im Bank policies – Economic Impact) and the environmental effects (see Ex-Im Bank policies – Environment).

Product Description

Size: There is no minimum or maximum limit to the size of the export sale that may be financed with Ex-Im Bank’s loan guarantee.

Coverage: Ex-Im Bank’s loan guarantee covers 100% of principal and accrued interest on any amount. (We also offer a medium-term insurance policy that can support financings up to $10 million.)
The total level of Ex-Im Bank support will be the lesser of 85% of the value of all eligible goods and services in the U.S. supply contract or 100% of the U.S. content in all eligible goods and services in the U.S. supply contract.

Cash Payment: Ex-Im Bank requires the buyer to make cash payment to the exporter equal to at least 15% of the U.S. supply contract. The 15% cash payment can either be borrowed from a lender or the exporter at market terms, or be from the buyer’s own funds.

Repayment Terms: Generally, the repayment term of a transaction is determined by numerous variables including but not limited to the borrower’s financial condition, the common repayment terms the market gives such products, specific industry practices, industry and country conditions, useful life, OECD and Berne Union agreements, and the matching of terms offered by other foreign government-sponsored financing.

Repayment terms up to five years are generally available for exports of capital equipment and services. Terms up to 10 years may be available for transportation equipment and exports to large-scale projects.

Medium-Term Credit Standards: To qualify for Ex-Im Bank’s medium-term financing, borrowers must meet certain credit standards, depending on the size of the transaction, the nature of the buyer, and the goods and services being financed. If a buyer does not meet these standards, the use of guarantors and other credit enhancements may be used to qualify. (See Medium-Term Credit Standards.)

Application

Final Commitment (AP): If the contract has been awarded, either the lender or the international borrower may submit the loan guarantee application. Commercial lenders are often more familiar with the application process, which generally expedites their transactions. If the contract has been awarded and there is a lender ready to finance the transaction with Ex-Im Bank’s support, a final commitment (AP) application may be submitted.

Letter of Interest (LI): If the contract has not been awarded, then a lender, an exporter or an international borrower may request a nonbinding letter of interest (LI) containing Ex-Im Bank terms for the specific transaction. The LI is processed within seven working days, is valid for six months, and can be renewed.

Preliminary Commitment (PC): In exceptional cases, Ex-Im Bank will accept an application for a preliminary commitment (PC). A PC is a nonbinding expression of interest from Ex-Im Bank that the borrower's needs, as outlined in the application, generally meet Ex-Im Bank’s financing requirements.

(For more information on the application process, see How To Apply.)

Fees

Letter of Interest Application Processing Fee – $100
Preliminary Commitment Application Processing Fee – 0.1 of 1% of the financed amount
Commitment Fee – 0.125% per annum on the undisbursed balance of the loan
Facility Fee — one-sixteenth of one percent per annum is charged on the total financed portion of the credit guarantee facility in lieu of a commitment fee.
Ex-Im Bank Exposure Fee – Varies, depending upon tenor, country risk, and buyer credit risk. (See Exposure Fee Calculator.)

Page Updated: February 7, 2007