August 2 2018 Duarte CA Paul Duncan Regional Director Office 949 6600663 Email PaulDuncaneximgov Who We Are What We Do ExIm Bank is an independent agency of the United States Government ID: 781622
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Slide1
Export & Trade Round Table
August 2, 2018, Duarte, CA
Paul DuncanRegional DirectorOffice: (949) 660-0663Email: Paul.Duncan@exim.gov
Slide2Who We Are, What We DoEx-Im Bank is an independent agency of the United States GovernmentEstablished in 1934
Headquartered in Washington, DC Mission: Support U.S. exports in order to create and sustain U.S. jobs
Don’t think of Ex-Im Bank as a Bank – we aren’tDon’t view us
as a Governmental agency (although we are)Think of us as an insurance company – that is our core
Slide3Pre-Export Financing
Post-Export Financing
1. Working Capital
Guarantee
2. Insurance
3. Guarantees
4. Direct Loans
Our Products Cover the Spectrum
Slide4Working Capital Guarantee
Slide5Trade Terms as a Spectrum of Risk
Open Account
Cash Against Documents and other
Documentary Collections
Usance / Deferred Letters of Credit
Sight Letters of Credit
Payment in Advance
Seller Risk
High
Trade Terms
Buyer Risk
Low
Low
High
Slide6Would you turn down a sale if you HAD to offer terms? 6
Slide7Risk MitigationPrevention of catastrophic losses to one of the company’s largest, unprotected assets
Credit management tool
Competitiveness/MarketingGrowth of existing accountsNew market penetrationUtilization of A/R as an AssetBorrowing against foreign receivablesLower borrowing costsFrees up working capital and accelerates cash flowEXPORTER BENEFITS
Slide88Protects Against Non-Payment by
Foreign Buyer
Commercial Risks: insolvency and protracted defaultPolitical Risks: currency inconvertibility; war, revolution, insurgency, expropriation; cancellation of import or export licenseCoverage 90 – 95% of insured invoice valueTerms: 1 - 60 days for perishables1 – 180 days for consumables, spare parts, sales to distributors1 – 360 days for capital goods, bulk agricultural exportsShort-Term Export Credit Insurance
Slide9Expand relationship with exporting customersCompete effectively for new customers
Improve effectiveness of working capital loansImprove credit quality of loan portfolio
Can be utilized to conform to risk-weighted standards under Basel II and Basel IIILENDER BENEFITSAssignment of policy proceeds
Slide10EXPORTER-HELD INSURANCE POLICY
Sale of
US goods/services
Foreign Buyer
- or -
Pool of A/R from
M
ultiple
Foreign Buyers
US
Exporter
Premium
Claim(s
)
Payment
Slide1111Even Large – “Strong” Buyers should be covered
Slide12EXPORTER-HELD POLICY TYPES
Multi Buyer*
(Discretionary Credit Authority)
Express*(No Discretionary Credit Authority)
Single Buyer
(one policy per buyer)
Portfolio Coverage
(1) Standard; (2) Small
Business
Buyer 1
Buyer 2
Buyer 3
Buyer 4Self Insure, Letter(s) of Credit
Buyer 1Buyer 2Buyer …* Premium discount of 25% available when combined with SBA or EXIM
Working Capital Guarantee
Slide13EXPORTER-HELD POLICY TYPES (CONT.)
Slide14CREDIT INFORMATION
UNDERWRITING STANDARTS: OBLIGOR
FOREIGN BUYER
Buyer’s Credit Limit
Credit Report
Trade Reference
Bank Reference
Financial Statements
Up to $100,000
$100,001 - $300,000
$300,001 - $1,000,000
$1,000,001 - $10,000,000
-or-
EXIM
Bank’s Short-Term Credit Standards are available
at:
http
://
www.exim.gov/tools-for-exporters/credit-standards
Slide1515Exporter Qualification for
Multi-Buyer Policies w/ DCLThree years in business
One year exportingDUNS# with no adverse informationDUNS Paydex >5050%+ “US Content”No munitions – no military buyersFor “Express” policies, only one year operational history – no export experience needed. No DCL.
Slide1616DUNS# with no adverse information
Valid purchase order from foreign buyer with good creditNo
munitions – no military buyersExporter qualifications for Single Buyer/Single Country
Slide17What happens at the Back End:In US – easy to sue – overseas????In Making Claim – Notarize loss to EIBWe pay loss first
– then sue buyer showing:Purchase orderDelivery informationInvoiceCollection efforts
IF DCL’s used – credit info on buyerIf political or Inability to pay – no waiting
Slide18Oh, let’s not forget:Military Exports (exceptions apply)Foreign Content
Restricted Countries (CLS)Economic ImpactShippingAdditionality
Other options – MT, LT, FBIC, ELC, Supply Chain, PF
Slide19Thank you
exim
.govPaul Duncan949-660-0633Paul.Duncan@exim.gov