Selling in foreign markets has many upsides for a small business. Exporting can help you land new customers, uncover lucrative business opportunities, and compete with rivals from other countries. So why do less than 1 percent of U.S. small businesses export? Many fear that foreign customers will default on payment, or they are intimidated by the exporting process itself.
Export-Import Bank, the official export credit agency of the United States, offers a measure of confidence to small businesses ready but hesitant to expand internationally by providing a variety of resources and products that target the small exporter.
Export Credit Insurance
What happens if you send shipments to a buyer in Ghana but payment for goods never materializes? That’s a daunting risk for small exporters to shoulder alone. Ex-Im Bank mitigates that risk by providing export credit insurance, which covers commercial and political losses at 90 percent or more. The insurance also allows you to extend advantageous credit terms to qualified buyers and offers single-buyer and multiple-buyer policies, depending on whether you are selling to one customer or many.
Working Capital Guarantee
What if you need funding to pursue business with a new customer in India? Traditional lenders are often wary of business transactions involving emerging markets. Ex-Im Bank guarantees short-term working capital loans for purchases such as finished products for export or the raw materials and labor required to produce a product for export, so lenders can help small businesses take that next step.
To be eligible for Ex-Im Bank’s enhanced small business products, a business must do the following:
- Be in business at least one year
- Have a positive net worth
- Meet the Small Business Administration (SBA) definition of a small business (fewer than 500 employees)
- Have export credit sales of $7.5 million or less
- Export products that are at least 51 percent U.S. made
Ex-Im Bank provides information, forms, and resources on its Web site. Start your search for export guidance at its small business portal. The Ex-Im Online site allows exporters to log in and apply online, get quotes, follow their status, and more. You can also find working capital applications and forms on the site; simply fill them out online, print, sign, and mail to Ex-Im Bank. If you require personal assistance, a trade finance advisor can be reached by calling 800-565-3946 or by sending an inquiry via e-mail.
Ex-Im Bank also offers comprehensive seminars throughout the year for exporters. For example, a two-day seminar titled “Trade Finance Solutions for Exporters and Lenders” advises attendees on trade services available from the U.S. government.
Charlotte Jensen is an internationally published journalist, who specializes in business topics.