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Doing a lot of business overseas can create the need for special financing. Exporting goods can be lucrative but also risky if the importers are slow on the payment terms. The Export-Import Bank of the United States (Ex-Im Bank) was established to help U.S. companies find success with lenders for their exports by reducing the financial risks of international trade. With the aid of third party financers like the Ex-Im Bank lenders do not have to worry as much about the risks of war interrupting their profits or being unable to convert international currency. They also receive protection against buyer insolvency. The Ex-Im Bank also provide loan assistance that keep U.S. financing competitive with foreign exporters.

The Ex-Im Bank offers both pre-export financing and post-export financing to lenders. Pre-export financing provides a working capital guarantee to lenders who loan to exporters. It promises those lenders reimbursement for any exporter defaults up to 90 percent. Exporters use their export order accounts receivables and inventory as collateral for the loans and the working capital provided by the lenders allows them to keep their business moving.

Post-export financing is more like insurance. The Ex-Im Bank offers exporters credit insurance that will reimburse them when foreign buyers fail to pay after 180 days. This helps exporters guard against the significant risks of foreign politics and commercial uncertainties associated with selling to those not under U.S. law.

The Ex-Im Bank also extends medium and long-term loans to exporters, but the interest rates and fees can be higher on these loans. And finally, the Bank also offers guarantees to banks and other lenders as a way to encourage them to make export loans to foreign buyers. This fosters a better climate for U.S. exporters when their buyers can even get loans from the seller’s government.

The Ex-Im Bank programs are spelled out in full detail at http://www.exim.gov.


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