Ex-Im Bank financing provides a variety of products to meet the needs of its customers. These products include working capital guarantees to expand production and fulfill contracts, export credit insurance to ensure repayment by international buyers, and loan guarantees to extend credit to buyers.

1. Pre-Export Working Capital:

Working Capital Loan Guarantees
The working capital guarantee enables small- and medium-sized businesses to access funds to purchase raw materials and finished goods for export; to pay for materials and overhead to produce goods and services for export; and to cover stand-by letters of credit, and bid and performance bonds. This product gives lenders the confidence to extend loans to exporters for their pre-export funding needs. Lack of working capital is one of the greatest barriers facing U.S. small businesses trying to produce goods or provide services for export. Despite their creditworthiness, these exporters sometimes find local banks reluctant to make working capital financing available to them.

The working capital guarantee and export credit insurance programs remain the workhorses of the environmental exports program, and are of particular benefit to Small and Medium Enterprises (SMEs). Many of these SMEs, having previously relied on venture capital in the first round of their growth, are now seeking other means of financing to expand their global sales. With Ex-Im Bank’s early-stage intervention, small companies can grow their international business and ultimately attract more equity investment.

For a list of Ex-Im Bank delegated authority lenders that can commit our working capital loan guarantee at the time of loan processing, go to Lender Referral List.

2. Short-, Medium- and Long-Term Financing:

Short-Term

Export-Credit Insurance
The short-term environmental export insurance policy provides enhanced short-term, multi-buyer and single-buyer insurance coverage for environmentally beneficial export sales by U.S. small businesses. The policy provides the exporter with the ability to offer credit terms to its foreign customers for up to 180 days. The features include:

• 95% coverage on commercial and political risk with no deductible
• Advance deposit of $500
• Enhanced provision for assignment of insured receivables
• Simplified premium rate schedule

Medium- and Long-Term

• Enhanced medium-term insurance and guarantees
• Long-term loans and guarantees

Export-Credit Insurance
The ability to offer credit terms or financing is often the most critical element in competing for and winning export sales. Increasingly, international buyers expect the U.S. supplier to offer unsecured credit terms such as “open account” rather than demand payment by letter of credit or cash in advance. U.S. environmental exporters can offer better terms and compete more effectively when backed by Ex-Im Bank financing. Ex-Im Bank’s export credit insurance policies protect the U.S. exporter against both the political and commercial risks of a foreign buyer defaulting on payment, allowing them to comfortably extend credit to the buyer.

Policies for single or multiple buyers may be obtained for single or repetitive export sales and for leases. Short-term policies (up to 180 days) under the Environmental Exports Program generally cover 95 percent of the principal for political and commercial risks, as well as a specified amount of interest. Medium-term policies (one to five years) are also available and cover 100 percent of political and commercial risks. The Ex-Im Bank insurance policy encourages the U.S. supplier to extend “open account” terms to the customer by providing security of repayment regardless of the political or commercial uncertainty in the country of the buyer. The insurance policy also allows the supplier to discount this “receivable” with their local lender.

Medium- and Long-Term Financing
Access to financing for international buyers of U.S. goods and services often determines a sale order for a U.S. supplier. Even creditworthy buyers can find it difficult to obtain credit through traditional financing sources. Ex-Im Bank’s Environmental Exports Program allows international buyers to purchase U.S. environmental goods and services at attractive terms and competitive rates.

Loan Guarantees
Ex-Im Bank’s loan guarantees help private and public sector international buyers obtain competitive financing for the purchase of U.S. goods and services. Guarantees cover 100 percent of principal and accrued interest against both political and commercial risks of nonpayment. With an Ex-Im Bank loan guarantee, the interest rate provided by the private lender is typically more affordable to the buyer. The total level of Ex-Im Bank support is generally 85 percent of the value of all eligible goods and services in the U.S. supply contract. Ex-Im Bank requires the buyer to make a cash payment to the exporter equal to at least 15 percent of the U.S. supply contract. The 15 percent cash payment can be borrowed either from the lender or the exporter at market terms or can be from the buyer’s own funds.

To qualify for Ex-Im Bank’s financing, borrowers must meet certain credit standards, depending on the size of the transaction, the nature of the buyer, and the useful life and end use of the goods and services being financed. If a buyer does not meet these standards, guarantors and other credit enhancements may be used to qualify. Ex-Im Bank’s Environmental Exports Program offers enhanced terms and conditions for the purchase of qualified U.S. environmental goods and services.

3. Project and Structured Finance:

Project and structured financing are two options for environmental projects when traditional sources of repayment are unavailable or insufficient. Although more complicated than ordinary corporate credits, these financing structures may allow some small or recently established companies to finance export purchases that are larger than their financial statements would normally support. Ex-Im Bank can respond flexibly and effectively to these challenges to make environmental deals happen.

Limited Recourse Project Finance
In limited recourse project finance, repayment is assured through the project’s future cash flows and highly structured financial and security arrangements. While the complexity of project finance can give rise to advisory and other transaction costs that are too great for small deals, Ex-Im Bank can minimize these costs. For projects of less than $30 million, Ex-Im Bank foregoes the retention of financial advisors. On relatively small deals over $30 million, Ex-Im Bank can work creatively to manage transaction costs. For example, Ex-Im Bank supported $68 million in debt for the Ormat Leyte Geothermal Project in the Philippines while succeeding in keeping the cost and time needed to close the transaction at a reasonable level. For more information go to project and structured finance.

Structured Finance
Another solution for small projects is structured finance. A hybrid of corporate and project finance, structured finance involves recourse to a company’s balance sheet as in corporate finance and certain special credit enhancement features used in project finance such as special purpose accounts, loan covenants, collateral security, insurance requirements and letters of credit. By tailoring the use of potentially complicated features of project finance to just what is needed for a particular deal, the time to close a transaction and the transaction costs are a fraction of those of limited recourse finance. Ex-Im Bank’s staff officers will work diligently to find the right solution for your transaction. For more information go to structured finance for small projects.

* Exports to Category I countries are eligible for up to 8.5 year repayment terms, while exports to Category II countries are eligible for up to 10 years. Non-nuclear power plants are eligible for up to 12-year repayment terms, regardless of country category. Under an OECD agreement that became effective on July 1, 2007, and is to remain in effect for a trial period of two years, the maximum repayment term for certain renewable energy and water sector exports has been extended to 15 years, irrespective of the OECD country category. Please see Ex-Im Bank's Standard Repayment Terms for more information.

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