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Pre-Export FinancingWorking Capital Guarantee ProgramThankyouforjoiningus,theWebinarwillbeginshortlyWhileyouarewaitingpleasecheckouttheupcomingwebinarson
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Main Title of PresentationSub-heading
Name of PresenterTitle of Presenter
Date
Pre-Export FinancingWorking Capital Guarantee ProgramNOVEMBER 10, 2016
XiomaraCreque-BrombergExportFinanceManagerintheOfficeofMinorityandWomenOwnedBusinessesofEXIM’sSmallBusinessGroup• Sheconductsbusinessdevelopmentmissions,visitsEXIMprospects,costumers,banks,organizationsandspeaksbeforeexportingandinternationalgroups.• Morethan25yearsofexperienceinthebankingandcorporatesector,shehasmanagedaportfoliocomprisedofgroundbreakinginfrastructure,oil&gasandenergyprojectsintheAmericas.
Today’s Presenter
Note: Provides no protection to exporter against foreign buyer non-payment
Working Capital Guarantee Program – Basic Parameters
Ø90 % Guarantee on principal and interest for export-related inventory and A/R
§ Guarantee also covers certain liquidation costs
ØGenerally one year or less
ØMust be fully collateralized
ØCovers exporter performance risk
Lines of Credit
ØTransaction Specific
ØTransaction Specific Revolving
ØRevolving§ Multiple transactions or specifically
identified ones§ May be committed for up to 3 years
with annual reviews
U.S. Content Policy
ØGoods must have at least 50% U.S. content to guarantee the entire transaction
ØExports must be manufactured in and shipped from the U.S.
Lender Benefits
ØExpand services to existing customersØAttract new customersØIncrease profitØImprove credit’s risk ratingØMeet CRA requirements with limited risk
Exporter Benefits
ØIncrease sales/profitsØExpand collateral base
§ Export-related inventory, including WIP
o Supports Standby L/Cs, Bid and Performance Bonds
§ Export-related accounts receivable
Expansion of your Client’s Collateral Base
Sectors Supported
19%
18%
15%
12%
10% 9% 9%
8%
Frozen Foods Medical Equipment/Devices
Electrical Instruments Telecommunications
Air Quality Equipment Testing Equipment
Lumber and Millwork Transportation Equipment
Type of Exporters
ØManufacturersØTrading CompaniesØWholesalers/DistributorsØService Companies
Eligible U.S. Exporters
Ø Reasonable assurance of repayment§ Minimum 1 year operating history
§ Debt service ability
§ Adequately capitalized relative to requested loan amount
Ø Business operations in the U.S.Ø Indirect exporters
§ 100% of line of credit
Borrower Profile
Ø Tight liquidity, negative cash flowØ Losses or erratic earningsØ Minimal net worth; short operating historyØ Large contract in relation to balance sheetØ Collateral shortfall; WIP financing needed
Use of Financing
L/Cs, Bid and Performance Bonds
Ø Commercial or Standby (Domestic and Foreign)§ Collateralized at 25% (10% prior approval)
§ Term cannot exceed loan term
Ø Warranty Letters of Credit§ Lender must extend other credit
§ 100% collateralized; 25% must be in cash
§ Maximum Amount: 20% of loan up to $1,500,000
§ Term cannot exceed loan term
Paying Off Existing Lines
Ø Initial disbursement may take out existing loan, subject to:§ Borrower’s financial condition
§ Sufficient collateral
§ Additionality guidelines
§ EXIM Bank prior approval
Restrictions on Use of Funds
Ø No disbursements without export orders unless pre-approved; sampling is required
Ø Inventory less than or equal to 60% of outstanding loan on revolving lines
Ø Purchase of fixed assets
Ø Military exports
Ø Off-cover countries
Ø Acquisitions
Eligible Collateral – Export Related A/R
Ø Export-Related Accounts Receivable§ Up to 90% advance rate
§ Remove if >60 days late, 90 days with insurance
§ Sales on terms not to exceed 180 days
Ø Retainage Accounts Receivables have a 25% RateØ Receivables must be in US Dollars
§ A waiver can be requested. Unhedged foreign currency has a 70% advance rate.
Ineligible Collateral – Export Related A/R
Ø No intra-company receivables
Ø No receivables from military organizations
Ø No receivables from prohibited countries
Ø No L/Cs until goods are shipped
Eligible Export Related Inventory
Ø May include raw materials; work-in-progress and finished goods
Ø Must be located in the US
Ø Must be valued at lower of actual cost or market value
Ø Advance rate up to 75%
Collateral for Service Companies
Ø Disbursements allowed against contract related-costsØ Contract and proceeds assigned to lenderØ Requirements
§ 3 years audited or reviewed financial statements
§ Demonstrated ability to perform under contract
Terms of Sale
Ø Cash payment prior to shipping
Ø Irrevocable L/C sometimes confirmed
Ø Receivables insured with export credit insurance (EXIM Bank or other comparable insurance)
Ø Uninsured, open account
Ø Documentary collections
EXIM Bank Fees
Ø Application Fee - $100Ø Facility Fee - Annual
§ 1.75%
Ø Reduced Facility Fee – Annual§ 1.25%
§ At least 4 of 7 RMA Median Standard Met
§ 100% of export receivables are L/C’s or insured
Delegated Authority Activity
Ø Over 98% of our transactions are done by Delegated Authority Lenders
Ø Lender’s are not required to have to EXIM Bank approval before closing
Authorizations
$880$1,095 $1,174 $1,255
$1,381$1,531
$2,178
$3,227 $3,253
$2,599$2,389
$620$850 $918 $990 $1,076
$1,233$1,450
$2,151 $2,074
$1,794 $1,792
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Millions
FiscalYearEnd
WorkingCapitalGuaranteeAuthorizationsFY2004throughFY2014
TotalAuthorizations SmallBusinessAuthorizations
©2015 Export-Import Bank of the United States
www.exim.gov1-800-565-3946 (EXIM)
Contact:Xiomara Creque-BrombergExport Finance Manager Minority and Woman owned BusinessPhone: 202-565-3477Email: [email protected]
Questions?
Followingthiscallyouwillreceivelinkstothepodcastofthissession,oryoucanfindthelinksonwww.wipp.org underExportNOW!
Forquestions,[email protected]
Thank You for Participation
