The Export-Import Bank of the United States (US Exim) has extended a string of Covid-19 relief measures for another year, as it works to help American exporters navigate their recovery from the pandemic.

A host of temporary support policies, first rolled out in March last year, had been due to come to a halt in April.

But in recent weeks, the bank’s board of directors confirmed it would renew all the amendments made to three of its programmes, and also keep in place a bridge financing programme it created in the throes of the pandemic to help foreign purchasers of US goods.

The temporary relief measures will now last until April 2022 and apply to US Exim’s working capital guarantee, supply chain financing (SCF) guarantee and pre-export financing programmes, as well as its bridge financing initiative.

“We will continue to demonstrate our commitment to the needs of US exporters, their international buyers, and Exim’s lending partners in order to help expand US exports and employment as our nation’s economy recovers,” says US Exim’s acting first vice-president and vice-chairman, James Cruse.

Such support will supplement the wider Biden administration’s efforts to fire up the US economy this year, with the president inking a US$1.9tn relief bill in March that analysts widely believe will spur on GDP growth.

Credit insurer Coface predicted in an April report that after a 3.5% contraction in 2020, US GDP will rebound by 5.7% in 2021, with the strength of the recovery in part driven by the “unprecedented fiscal response to the crisis”.

At the same time, with economies opening up globally, figures from the World Trade Organization show that North American merchandise exports are expected to grow by 7.7% this year, after plummeting by more than 8% last year.

Nevertheless, a spokesperson for US Exim tells GTR that while the business climate outlook is “much improved” this year for American exporters, it is still an “uncertain period” for US businesses.


A breakdown of the measures

As part of its renewed measures, US Exim says it will continue to support transportation-related and “other large-scale exports” through its bridge financing and pre-export financing programmes.

Last year, US Exim said it would create the entirely new bridge financing programme to help foreign purchasers of US goods that were “having difficulty obtaining financing from the commercial markets”.

The bank said at the time that buyers abroad were expected to need “several billion dollars in temporary, short-term bridge financing to enable them to acquire US goods and services”.

While US Exim isn’t typically a bridge financing entity, former chief banking officer Stephen Renna told GTR last year that there had been a “sudden and very material retrenchment of private lending market from the marketplace”.

The temporary expansion of the pre-export payment policy will also remain in place for another 12 months, which will likely benefit US exports of long-lead manufactured products such as satellites and large turbines.

US Exim moved last year to make that programme more accessible by including transactions in which the bank was not providing the long-term financing to the foreign buyer.

Such changes were brought in to ease the burden on American manufacturers, which may have otherwise struggled to obtain pre-export payments from foreign buyers to complete the manufacturing of their goods.

Last year’s amendments to US Exim’s SCF guarantee programme – which had been seldom used since being launched in 2010 – will also be kept in place, waiving a previous requirement for 50% of suppliers accessing the scheme to be small businesses.

The bank has also kept changes to its working capital guarantee programme (WCGP) which “facilitates loans from commercial lenders to creditworthy US businesses that export over the term of the loan”.

Running since the 1980s, the WCGP currently has 49 active Delegated Authority lenders, and with last year’s Covid-19 changes was made “more flexible for borrowers”.

Amendments included temporarily expanding the definition of eligible inventory from only export-related inventory to any inventory that could potentially be exported.

US Exim says in its 2020 annual report that both the SCF guarantee and WCGP have been of particular use to American exporters in the past 12 months.

“In July, Exim’s board utilised the agency’s temporarily expanded supply chain finance guarantee program to authorise a 90% guarantee of a US$510mn one-year purchase facility to support an estimated US$3bn in export sales of aircraft engines, as well as a separate US$97mn working capital guarantee supporting over US$211mn in export sales.”