Pre-Export Financing. Main Title of Presentation. Working Capital Guarantee Program. Name of Presenter. Sub-heading. Title of Presenter.

Transcription

1 Main Title of Presentation Sub-heading Name of Presenter Title of Presenter Date Pre-Export Financing Working Capital Guarantee Program Thank you for joining us, the Webinar will begin shortly While you are waiting please check out the upcoming webinars on

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3 Main Title of Presentation Sub-heading Name of Presenter Title of Presenter Date Pre-Export Financing Working Capital Guarantee Program NOVEMBER 10, 2016

4 Today s Presenter Xiomara Creque-Bromberg Export Finance Manager in the Office of Minority and Women Owned Businesses of EXIM s Small Business Group She conducts business development missions, visits EXIM prospects, costumers, banks, organizations and speaks before exporting and international groups. More than 25 years of experience in the banking and corporate sector, she has managed a portfolio comprised of ground breaking infrastructure, oil & gas and energy projects in the Americas.

5 Working Capital Guarantee Program Basic Parameters Ø 90 % Guarantee on principal and interest for export-related inventory and A/R Guarantee also covers certain liquidation costs Ø Generally one year or less Ø Must be fully collateralized Ø Covers exporter performance risk Note: Provides no protection to exporter against foreign buyer non-payment

6 Lines of Credit Ø Transaction Specific Ø Transaction Specific Revolving Ø Revolving Multiple transactions or specifically identified ones May be committed for up to 3 years with annual reviews

7 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.

8 Lender Benefits ØExpand services to existing customers ØAttract new customers ØIncrease profit ØImprove credit s risk rating ØMeet CRA requirements with limited risk

9 Exporter Benefits ØIncrease sales/profits ØExpand collateral base Export-related inventory, including WIP o Supports Standby L/Cs, Bid and Performance Bonds Export-related accounts receivable

10 Expansion of your Client s Collateral Base

11 Sectors Supported Frozen Foods Electrical Instruments Air Quality Equipment Lumber and Millwork Medical Equipment/Devices Telecommunications Testing Equipment Transportation Equipment 12% 10% 9% 9% 8% 15% 18% 19%

12 Type of Exporters ØManufacturers ØTrading Companies ØWholesalers/Distributors ØService Companies

13 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

14 Borrower Profile Ø Tight liquidity, negative cash flow Ø Losses or erratic earnings Ø Minimal net worth; short operating history Ø Large contract in relation to balance sheet Ø Collateral shortfall; WIP financing needed

15 Use of Financing

16 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

17 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

18 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

19 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% Rate Ø Receivables must be in US Dollars A waiver can be requested. Unhedged foreign currency has a 70% advance rate.

20 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

21 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%

22 Collateral for Service Companies Ø Disbursements allowed against contract related-costs Ø Contract and proceeds assigned to lender Ø Requirements 3 years audited or reviewed financial statements Demonstrated ability to perform under contract

23 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

24 EXIM Bank Fees Ø Application Fee - $100 Ø 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

25 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

26 Authorizations Working Capital Guarantee Authorizations FY 2004 through FY 2014 $3,500 $3,227 $3,253 $3,000 $2,500 $2,178 $2,599 $2,389 Millions $2,000 $1,500 $1,000 $500 $880 $620 $1,095 $850 $1,174 $918 $1,255 $990 $1,381 $1,076 $1,531 $1,233 $1,450 $2,151 $2,074 $1,794 $1,792 $ Fiscal Year End Total Authorizations Small Business Authorizations

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28 Contact: Xiomara Creque-Bromberg Export Finance Manager Minority and Woman owned Business Phone: (EXIM) 2015 Export-Import Bank of the United States

29 Questions?

30 Thank You for Participation Following this call you will receive links to the podcast of this session, or you can find the links on under Export NOW! For questions, please contact Ivana Pivovarnik at