The Export-Import Bank of the United States (US Ex-Im) has raised the upper limit of its small business multi-buyer export credit insurance policy. This will allow more small businesses to export their goods and services more easily.
US exporters designated as small businesses under small business administration standards, and with annual export credit sales of US$7.5mn or less, are now eligible for enhanced coverage under US Ex-Im’s short-term small business multi-buyer insurance policy. Previously the eligibility ceiling was US$5mn.
The policy enhancements include: 1) no first loss deductibles, 2) discounted insurance premiums, and 3) the receipt of cost-free, exporter performance risk protection for lenders financing receivables for qualified exporters.
"This change is designed to increase US small business exports by expanding the availability of financing to them," says US Ex-Im chairman and president Fred Hochberg. "Exporting is critical to creating and preserving American jobs, especially while the current global financial crisis is being resolved."
The broadened programme eligibility will be effective December 1, 2009 for new small business multi-buyer policy applicants. Current US Ex-Im multi-buyer policyholders who previously were ineligible for coverage enhancements but are eligible under the new ceiling, will be offered conversions to the enhanced policy.
US Ex-Im's short-term multi-buyer insurance policies protect the exporter's portfolio of export credit risks. These policies are effective tools in helping US exporters to mitigate foreign credit risk, expand their marketing through extension of liberalised selling terms, and promote access to foreign receivable financing.
Over the past year, US Ex-Im has launched a number of other initiatives to strengthen support for small business exporters in the face of the economy's tightened liquidity.
For example, the bank opened its working capital guarantee programme to indirect US exporters. Companies that produce goods or services that are sold to US companies, and are subsequently exported, are now eligible to apply for working capital loans guaranteed by US Ex-Im.
Also, to support US exports to South Korea, the bank granted special delegated authority to help meet increased demand to insure US lenders' confirmation of Korean bank letters of credit. Senior US Ex-Im officials have been given the authority to approve requests for up to US$2.9bn in insurance cover involving letters of credit issued by 11 Korean financial institutions. Similar authorities have been provided by the bank to support financial institutions in India, Nigeria and Angola, among others.
In fiscal year 2009, US Ex-Im achieved its highest financing level since its establishment in 1934, authorising more than US$21bn in support of US exports. The bank also set a record for financing of US small business exports at US$4.36bn.
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