EXPORT FINANCING Export-Import Bank of the United States The Export-Import Bank of the United States (Eximbank) can provide export financing assistance to American companies through the following programs: Working Capital Guarantee Program: This program helps small businesses obtain critical pre-export financing from commercial lenders. Eximbank will guarantee 90 percent of principal and a limited amount of interest on loans or revolving lines of credit extended to eligible exporters. The funds may be used for such pre-export activities as buying raw materials or foreign marketing. For more information, contact the U.S. Division at (202) 566-8819. Export Credit Insurance: Through its agent, the Foreign Credit Insurance Association, Eximbank offers insurance which covers political and commercial risks on export receivables. For more information, contact the Insurance Division at (202) 566-8955. (1) The New-to-Export Policy is available to firms just beginning to export or with average annual export sales of less than $750,000 for the past two years. The policy offers enhanced coverage and a lower premium than usually found in regular insurance policies. (2) The Umbrella Policy is available to commercial lenders, state agencies, export trading companies, and similar organizations to insure export receivables of their small and medium-sized clients. (3) The Bank Letter of Credit Policy insures commercial banks against loss on irrevocable letters of credit issued by foreign banks for U.S. exporters. (4) The Multi-Buyer Policy insures all or a reasonable spread of an exporter's short- or medium-term export credit sales. (5) The Financial Institution Buyer Credit Policy insures individual short-term export credits extended by financial institutions to foreign buyers. (6) The Short-Term Single-Buyer Policy and the Medium-Term Single-Buyer Policy allow exporters to insure their receivables against loss due to commercial and specified political risks on a selective basis. (7) Lease Insurance Policies offer a lessor the opportunity to expand its overseas leasing program by providing comprehensive insurance for both the stream of lease payments and the fair market value of the leased products. Guarantee Program: This program provides repayment protection for private sector loans to creditworthy buyers of U.S. capital equipment and services exports. Coverage is available for loans of up to 85 percent of the U.S. export value, with repayment terms of one year or more. Eximbank's guarantee is available for fixed or floating rate export loans in U.S. dollars or convertible foreign currencies. For more information, contact the Export Finance Group at (202) 566-8187. Loan Program: This program provides competitive, fixed interest rate financing for U.S. export sales facing foreign competition backed by subsidized financing. Eximbank extends direct loans to foreign buyers of U.S. exports and intermediary loans to responsible parties that make loans to foreign buyers. Coverage is available for loans of up to 85 percent of the U.S. export value. The interest rates are the official minimum matrix rates agreed on by members of the Organization for Economic Cooperation and Development (OECD) and depend on the repayment period and the classification of the buyer's country. For more information, contact the Export Finance Group at (202) 566-8187. Engineering Multiplier Program: This program stimulates the exports of U.S. architectural, industrial design, and engineering services. Eximbank will extend loans or guarantees up to 85 percent of the U.S. export value of services involving projects with the potential of generating U.S. export orders of $10 million or double the original export contract, whichever is greater. It also will guarantee commercial financing for approved project-related costs in the host country of up to 15 percent of the U.S. export value. For more information, contact the Engineering Division at (202) 566-8802. Operations and Maintenance Contracts Program: This program helps U.S. firms compete for overseas contracts to operate and maintain new or established projects. Eximbank will provide loans or guarantees for up to 85 percent of the U.S. export value of operations and maintenance transactions with repayment terms of up to five years. The contract must provide a long-term benefit to the owner, such as training local personnel to take over the operation or establishment of permanent procedures to assure good operation of the project. For more information, contact the Engineering Division at (202) 566-8802. Foreign Credit Insurance Association The Foreign Credit Insurance Association (FCIA) helps U.S. exporters shipping on short-term credit (up to one year) to be assured of receiving payment while extending appropriate credit terms. As an agent of Eximbank, it insures U.S. companies against the risk of nonpayment by foreign buyers for commercial and political reasons. The insurance can cover 90 percent of the commercial risks and 100 percent of the political risks or 95 percent of all risks, a decision that is made by the policyholder. For more information, contact FCIA at (212) 306-5000. The Small Business Administration The Small Business Administration (SBA) can provide export financing assistance to American companies through the following programs: Export Revolving Line of Credit Program: This program guarantees loans up to $750,000, the proceeds of which can be used to finance foreign market development or labor and materials needed to manufacture or wholesale for export. The maximum maturity is 18 months. For more information, contact the Office of Financial Assistance at (202) 205-6497. International Trade Loan Guarantee Program: This program offers small businesses that can significantly expand existing export markets, develop new export markets, or those adversely affected by import competition, loan guarantees up to $1 million for facilities and equipment and up to $250,000 for working capital. Maturities of loans may extend up to 25 years. For more information, contact the Office of Financial Assistance at (202) 205-6497. Small Business Investment Companies: Licensed by SBA, firms whose investment strategies include export activities may receive equity capital or term working capital in excess of SBA's $750,000 statutory limit. For more information, contact the Investment Division at (202) 205-6734. Business Loan Guarantee Program: Financing for fixed-asset acquisition or general working capital purposes may be obtained; the program encourages private lenders to make loans of up to $750,000 to borrowers who could not borrow on reasonable terms without government help. For more information, contact the Office of Financial Assistance at (202) 205-6490. The Overseas Private Investment Corporation The Overseas Private Investment Corporation (OPIC) can provide export financing assistance to American companies through the following programs: Finance Programs: Medium- to long-term financing for overseas investment projects is made available through loan guaranties and direct loans. Loans generally range up to $6 million and are reserved exclusively for projects significantly involving U.S. small businesses or cooperatives. Guarantees, as large as $50 million, are available for projects sponsored by any U.S. company regardless of size. OPIC's financing commitment may range up to 50 percent of total project costs for new ventures and up to 75 percent for expansion of existing successful operations, with final maturities of 5 to 12 years or more. A special small contractor's guarantee program is also available. For more information, contact Public Affairs at (202) 457-7087. Lease Financing Program: This program offers loans and guarantees to foreign leasing companies in which there is a significant U.S. private business interest. Terms of the guarantee are typically from four to seven years. For more information, contact Public Affairs at (202) 457-7087. Small Contractor's Guarantee Program: This program will guarantee an eligible financial institution for up to 75 percent of an on-demand standby letter of credit or other form of payment guarantee issued on behalf of a small business construction or service contractor. For more information, contact Public Affairs at (202) 457-7087. The U.S. Department of Agriculture The U.S. Department of Agriculture (USDA) can provide export financing assistance to American companies through the following programs: Export Credit Guarantee Programs: These programs are designed to expand U.S. agricultural exports by stimulating U.S. bank financing of foreign purchases. The programs operate in cases where credit is necessary to increase or maintain U.S. exports to a foreign market and where private financial institutions would be unwilling to provide financing without a guarantee. These programs guarantee letters of credit from foreign financial institutions against default. For more information, contact the USDA at (202) 720-4221. Market Promotion Program: Authorized by the Food, Agricultural, Conservation, and Trade Act of 1990 and administered by USDA's Foreign Agricultural Service, the Market Promotion Program promotes a wide variety of U.S. commodities in almost every region of the world. Surplus stocks or funds from the Commodity Credit Corporation are used to partially reimburse agricultural organizations conducting specific foreign market development projects for eligible products in specified countries. For more information, contact Marketing Operations at (202) 720-5521. Japanese Entities The Export-Import Bank of Japan (JEXIM): In order to increase Japan's imports, the JEXIM has expanded the scope of eligible borrowers for low-interest financing. Products of American companies are eligible for the Japanese Government import credit program. For information, contact: The Export-Import Bank of Japan The Export-Import Bank of Japan 375 Park Avenue, Suite 3601 2000 Pennsylvania Ave., N.W. New York, NY 10152 Suite 3350 Phone: (212) 888-9500 Washington, DC 20006 Phone: (202) 331-8547 The Japan Development Bank (JDB): The JDB has sharply increased low-interest financing offered to foreign companies for import-related facilities in Japan as well as for direct investment in Japan by U.S. companies. For information, contact: The Japan Development Bank The Japan Development Bank Center for Promotion of Direct Center for Promotion of Direct Investment in Japan Investment in Japan 1101 17th Street, N.W. 575 Fifth Avenue, 28th Floor Suite 1001 New York, NY 10017 Washington, DC 20036 Phone: (212) 949-7550 Phone: (202) 331-8696 The Export-Import Insurance Division of the Ministry of International Trade and Industry (EID/MITI): EID/MITI, which began operations in 1950, insures repayment of export credits. EID/MITI insurance enables commercial banks, which normally would be unwilling to assume the risk of certain types of financing, to fund overseas projects. EID/MITI has a wide range of short, medium, and long-term insurance programs for Japanese and non-Japanese exporters, importers, and investors. For more information, contact: Ministry of International Trade and Industry Export-Import Insurance Division 1-3-1, Kasumigaseki Chiyoda-ku, Tokyo 100, Japan In May 1991, the Export-Import Bank of the United States reached an agreement for cooperation with the financial institutions of the Government of Japan (JEXIM, JDB, and EID/MITI) to advance mutual objectives in: (1) expanding the role of exports in the growth of global trade, (2) facilitating the flow of trade and investment capital to developing countries, (3) assisting cooperation between suppliers and banks of Japan and the United States, and (4) increasing the volume of exports from the United States to Japan and other countries. It is expected that the cooperative application of financing support by the respective agencies will enable projects to be financed which otherwise could not proceed for lack of complete capital resources. In particular, it is expected that U.S. exports will benefit from more effective access to financing supported by the Japanese agencies.