Accounts Receivable Financing: Exporting Green Products

Join writer, Gregg Elberg in an enlightening article about environmentally conscious lending. Learn how green exports both benefit the environment and the economy.

What is the U.S. Ex-Im Bank?

he U.S. Ex-Im Bank is an independent agency of the U.S. government. It was established in 1934 to finance the export sales of goods and services produced in the USA. Since 1934 it has supported over $450 Billion in exports. The Ex-Im Bank supports short, medium, and long term financing to creditworthy international customers both in the public and private sectors. It provides working capital guarantees to USA exporters. Products include Direct Loans, Guarantees, Export Credit Insurance, and Working capital Guarantees. There are special initiatives of environmental exports.

What is the U.S. Ex-Im Bank Environmental Exports Program?

It provides support for environmentally beneficial exports mandated in their charter. It is a pro-active business development and enhancement to existing programs. It provides long-term loans and guarantees of 10-15 years after project completion. Repayment terms of 15 years are available for renewable energy and water treatment projects. Interest may be capitalized during construction. During the past decade, environmental export funding has increased from 13 projects per year to over $2 Billion in fundings.

What is the Guaranteed Loan Program?

Guaranteed loans are made by commercial banks (U.S. or Foreign banks) to a foreign buyer with a 100% unconditional repayment guarantee form the Ex-Im Bank. The guarantee covers 85% of the U.S. content of the transaction. Banks often finance the 15% required cash payment. The guarantee is available in major foreign currencies.

What can the Ex-Im Bank do for small projects?

The Ex-Im Bank makes credits decisions about potential projects in several ways: based strictly on the balance sheet of the borrower or guarantor; and also as limited recourse project finance with a special purpose company borrower and project cash flows as the source of repayment. Or, as a structured finance transaction with the borrower's balance sheet enhanced by special Ex-Im Bank features.

What is the Ex-Im Bank working capital guarantee?

It provides a 90-100% repayment guarantee for working capital loans, revolving or transaction based, made by commercial lenders to small businesses to finance export sales. The working capital guarantee serves as the collateral to the commercial lender by mitigating the risk inherent when the source of repayment for the loan is an overseas contract. It enables exporters to finance materials, labor, and overhead to produce goods and services for export. It enables exporters to cover standby letters of credit for bid and performance bonds, or payment guarantees. It enables the exporters to finance foreign sales receivables
The working capital guarantee program may be a transaction-specific facility; or a revolving line of credit. The term is generally up to 1-year and it is renewable. The loan supports advances made against export-related inventory and foreign accounts receivables. The loan advances up to 75% on inventory and up to 90% on foreign accounts receivables.

What are the eligibility requirements for the working capital guarantee program?

Applicants must have business operations in the USA. The USA made product must have a minimum of 51% USA content. The program supports exporters who are manufacturers, trading companies and service companies. There must be a reasonable source or repayment. The company must have a minimum 1-year operating history, positive net-worth and debt service ability.

Copyright © 2007 Gregg Financial Services

Mr. Elberg is a licensed attorney and licensed real estate broker. Gregg Financial Services is a full service brokerage for commercial finance companies and banks that fund B2B businesses. Mr. Elberg arranges funding from $25,000 to $50 million per month at competitive pricing, and works to reduce your financing costs as your company grows. For more information about GFS, please visit our website: www.greggfinancialservices.com or email:gregg@greggfinancialservices.com

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