One of the challenges that small to mid-sized businesses in the United States face is a problem with finding financing for international sales and growth opportunities. It can be extremely difficult for a traditional bank or lender to work directly with a business to move into these markets.
To support these United States companies that have the opportunity to expand into international markets as exporters, EXIM financing provides support to both the business as well as the traditional lender. There are several different programs EXIM can use to provide these levels of support.
Working Capital
EXIM, or the Export-Import Bank of the United States, doesn’t directly provide working capital to the business interested in moving into exports. Instead, the working capital loan guarantee program is able to provide EXIM financing to a business by guaranteeing the load for your bank.
In other words, EXIM works to provide a guarantee of a percentage of the loan the bank provides to your business should there be a default on the payment of the loan. With the guarantee in place, most banks are comfortable in making loans or extending the amount of the loan to provide additional working capital for the US based business.
Insurance
Another option in EXIM financing is export credit insurance. This is a specialized insurance to cover the risk of non-payment by an international buyer. With this insurance on the accounts receivables, your completed sales invoices awaiting payment can be used as an asset rather than turning into a liability for your business.
Either of these options can be highly effective for business in the United States selling to foreign markets to find a way to have the funds they need. The backing of the EXIM through working capital guarantee programs or export credit insurance, allow your traditional lender to provide the needed funding to continue to grow your business.
