Export Financial Assistance

Many small companies are not aware of the financing programs available to assist them in selling their goods to international markets. For example, the Export-Import Bank (Ex-Im Bank) working capital program guarantees a line of credit provided by a local US bank to support domestic borrowers to finance their company’s related inventory with an advance rate of up to 75% (including WIP) and export related accounts receivables with an advance rate of up to 90%. The line is generally extended for 1 year but on a case-by-case basis may be extended up to 3 years. The product must be exported from the U.S. and have a minimum of 51% U.S. content or added-value. The program also supports the financing of services including labor and overhead to produce goods and/or to provide services for export. The working capital guarantee has an annual facility fee of 1.5% however, the borrower may be eligible for a reduced facility fee of 1% if certain criteria are met.

This can also be combined with an export credit insurance policy proved by the Ex-Im Bank of the U.S. or a private sector insurance carrier. While insurance is not required, it is highly recommended since the working capital guarantee protects the lender, it does not protect the borrower in the event of non-payment from a foreign buyer.

There are also buyer financing programs available. The Ex-Im Bank medium term guarantee is a term loan provided by a local US bank to support an overseas buyer importing eligible capital goods and services from US exporters. The loan is up to 5 years on a case-by-case up to 7 years. The amount financed would be the lesser of 85% of the value of all eligible goods and services in the U.S. supply contract or 100% of the U.S. content in all eligible goods and services in the U.S. supply contract. The buyer is required to make a 15% down payment to the exporter which can either be borrowed from a lender or the exporter at market terms, or is from the buyer’s own funds.

One of the key ingredients to New England Machinery's growth through this down economy has been our international sales.  If your company is not currently selling internationally, you may want to look into it.  For more information on the availability of financial assistance in selling to international markets, contact a local bank or the Ex-Im Bank U.S. at www.exim.gov.

The author, Marge Bonura, is the Director of Sales & Marketing for New England Machinery, Inc. (NEM). NEM is a leading manufacturer of bottle unscramblers, cappers, orienters, retorquers, lidders, pluggers, pump sorter/placers, scoop feeders, hopper elevators and much more. The company has been in business since 1974 selling to the food, beverage, pharmaceutical, personal care, chemical, household products, automotive and other industries. For more information on NEM, visit their website at http://www.neminc.com/.