The Export-Import Bank (Ex-Im Bank) is the official export credit agency of the United States. Ex-Im Bank’s mission is to assist in financing the export of U.S. goods and services to international markets, enabling U.S. companies — large and small — to turn export opportunities into real sales that help to maintain and create U.S. jobs and contribute to a stronger national economy.
Ex-Im Bank was formed in 1934 with the intention of performing two-way trade between the United States and Russia but two years later trade was banned. The name of the bank was never changed and the focus since has been on exporting only. Ex-Im Bank’s head office is located in Washington but the bank has regional offices throughout the country.
Joseph H. Ringer is regional director of the Ex-Im Bank in Houston and said the agency works with several companies in the oil and gas industry including equipment manufacturers and suppliers.
“Companies exporting U.S. made products, including those in the oil and gas industry, are eligible for Ex-Im Bank’s programs,” he said. “What Ex-Im Bank does is allow exporters, as long as they qualify and as long as we’re open in that country, to ship to the buyer on open account terms. This frees up the buyer from having to go to its bank and acquire a letter of credit or wire money in advance, which in a lot of these developing countries is difficult. If the buyer can get supplier credit through an Ex-Im Bank program, it’s a win-win situation.”
According to Ringer, Ex-Im Bank does not compete with private sector lenders but provides export financing products that fill gaps in trade financing.
“We assume credit and country risks the private sector is unable or unwilling to accept,” he said. “We can also help to level the playing field for U.S. exporters by matching the unequal financing that other governments provide to their exporters.”
Ex-Im Bank provides working capital guarantees (pre-export financing); short-term and medium-term export credit insurance; medium- and long-term loan guarantees (buyer financing); and, on a case-by-case basis, direct loans (buyer financing). No transaction is too large or too small for Ex-Im Bank and, on average, more than 85 percent of its transactions directly benefit U.S. small businesses. Ringer said Ex-Im Bank can assist with risk protection, extending credit to buyers and obtaining working capital.
“We know in order for you to begin exporting internationally, you’ll need access to a dependable source of working capital that provides financial stability while you expand exports,” Ringer said. “Ex-Im Bank’s working capital financing does that by enabling small- and mid-sized business exporters to obtain loans, which facilitate the export of goods or services made by commercial lenders and backed by our guarantee. These loans provide the liquidity and confidence to accept new international contracts, grow export sales and compete more effectively in the international marketplace.”
Ex-Im Bank’s working capital guarantee encourages commercial lenders to make export working capital loans by providing them with a 90-percent loan backing guarantee, which decreases their risk. For example, Ringer said he recently worked with a drilling rig manufacturer in Houston looking to sell its rigs overseas. The company was granted a $25 million working capital guarantee and it was able to begin manufacturing rigs for export.
Ex-Im Bank is a “sunset” agency, which means it has a definite life. The bank’s charter has been renewed by Congress since 1934 but it is still up for renewal at the end of each year. According to Ringer, Ex-Im Bank is one of only three federal government agencies in the United States that is profitable and self-sustaining.
For more information, visit www.exim.gov or contact Joseph Ringer at (281) 721-0467, (713) 301-1749 (cellphone) or joseph.ringer@exim.gov.
