During the last decade, U.S. exports of goods and services have increased more than 172 percent. Consequently, the need for trade financing has risen commensurably—especially by small and medium-size exporters. More companies are finding that their ability to effectively manage financial risk and offer more favorable terms to foreign customers has increased their level of global competitiveness.

The Export-Import Bank (Ex-Im Bank) of the United States has successfully provided U.S. exporters with financing solutions for years. In fact, in over 60 years, the independent U.S. government agency has supported more than $300 billion in U.S. exports. It guarantees working capital loans for U.S. exporters, lends to foreign purchasers directly, and provides credit insurance to protect against the risks of non-payment by foreign buyers for political or commercial reasons.

Luis Clay, Vice President HSBC Trade Services, a unit of Marine Midland Bank, said, "Ex-Im Bank has undertaken a shift of focus in order to assist small business. Of all Ex-Im Bank services, guarantees covering working capital loans to U.S. exporters is the most popular among small firms."

The Working Capital Guarantee covers 90 percent of the principal and interest on commercial loans to small and medium-size companies that need funds to buy or produce U.S. goods or services for export. The loan must be fully collateralized utilizing inventory, accounts receivable, or other acceptable collateral. The guarantees may be for a single transaction or for a revolving line of credit. Guaranteed loans generally have maturities of 12 months and are renewable.

The independent government agency does not compete with commercial lenders, but assumes the risks they cannot accept. It seeks to provide a level playing field for U.S. exporters by countering the export credit subsidies of other governments.

John Nemcek, President and CEO of Buffalo Technologies Corporation based in Buffalo, NY, couldn't be happier with the agency. The company recently received a $5.1 million order from China. "Without the $2.4 million working-capital loan from Ex-Im Bank, we couldn't have completed the project," said Nemcek. "And the approval process was very quick." "The project went so well that we'll be getting a second order from China," he added.

Ex-Im Bank's programs are easily accessible. "The idea is to increase the number of loans to small businesses while reducing risks and streamlining procedures," Clay said. In doing so, "Ex-Im Bank allows local banks and even state and local agencies, such as U.S. Export Assistance Centers and industrial development agencies, to make Working Capital lending decisions on its behalf." If you choose, you can also work directly with Ex-Im Bank. For more information call Ex-Im Bank (Tel. 1-800-565-EXIM), to retrieve information by fax, press 1, then 2 at the voice prompts), send e-mail ( This email address is being protected from spambots. You need JavaScript enabled to view it. ), or visit their website (http://www.exim.gov).

About The Author John Manzella [Full Bio]

John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.




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