An Overview Of Exim Financing

Moving from the domestic marketing of a product or service to selling internationally is a goal for many businesses in the United States. Unfortunately, many companies from small to large, see international sales as a challenge they simply cannot afford to take.

To address this issue, the United States government formed the Export-Import Bank of the United States, or more often simply known as the EX-IM bank. This is not a true bank; rather it has operated since 1934 as an independent export credit agency that has been providing American businesses with financial tools to market goods and services internationally.

While this government agency offers a range of services, there are two important categories to consider. One is export credit insurance, and the other is the working capital loan guarantee program. Both of these options can provide the necessary EXIM financing any business requires.

Export Credit Insurance

As with any other type of insurance policy, this type of EXIM financing provides protection for the US-based company in the event that a foreign company or entity defaults on payment. This also helps US banks have confidence in lending to companies doing business overseas as risk is largely eliminated.

Working Capital Loan Guarantee

The second type of EXIM financing a company may want to consider is the working capital loan guarantee program. This is not provided directly to the US business but rather to the bank or lending institute that is providing a loan. Through this program, a percentage of the loan will be repaid by EXIM should there be a default by the customer.

With these options, the confidence in providing funding for US-based businesses is similar as to banks’ lending to companies in the US doing business domestically. With this confidence, it is much easier for a small to mid-sized business to get the funds they need to move into new markets.

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