World Trade Center
of New Orleans
INTRODUCTION
U.S. SMALL BUSINESS
ADMINISTRATION
EXPORT-IMPORT
BANK OF THE UNITED STATES (EX-IM BANK)
OVERSEAS PRIVATE
INVESTMENT CORPORATION (OPIC)
THE EXPORT FINANCE
MATCHMAKER
LOUISIANA BANKS
WITH INTERNATIONAL DEPARTMENTS
INTRODUCTION
Arranging satisfactory financing is a common obstacle for companies beginning
or expanding their exports or imports of goods or services. A number of factors
-- such as the long distances involved, and disparate customs and business
practices -- tend to make international trading riskier and more expensive than
doing business at home.
However, in recent years there has been a growing awareness in this country
of the strategic importance of international trade to the U.S. economy. As a
result, federal, state, and local governments have established programs that
help lower the cost of export finance. In general, these public sector programs
reduce financing costs by spreading the financial risks over a much larger pool
than would be possible without public sector involvement.
What these programs have in common is a sharing of risks between the
exporter, the government, and private lenders. This brochure is intended to
acquaint the reader with these various programs and with the offices and
institutions in Louisiana that can assist you in using them.
This brochure also emphasizes the vital role which private banks play. It is
important to remember that in virtually all these programs trade financing is
provided largely by private banks, which work together with government agencies.
Private credit insurance is available to supplement these government programs.
Information on the rates and fees charged for using these programs can be
obtained from sponsoring government agencies or from participating private
banks. Keep in mind that banks assess their own fees in addition to those
charged by the agencies, and that the issuance of loans and insurance is subject
to the approval of the sponsoring agency and the participating private bank.
Also note that the programs outlined in this brochure are not available for
financing imports from abroad into the U.S. For assistance in financing such
imports, companies should contact private banks experienced in import financing,
as well as the embassies and consulates of foreign governments which are located
in the U.S.
HOW THIS INFORMATION IS ARRANGED
The following trade finance information is arranged by U.S. government export
program. Keep in mind that federal agencies work closely with
private banks in Louisiana (see contact list below) and with state and local
representatives (also listed below). You should feel free to contact any of
these entities to begin taking advantage of the trade financing vehicles
described.
As part of its mandate to support the efforts of growing businesses,
the SBA directly aids U.S. exporters. To participate in SBA programs, the
applicant must be deemed a "small business" under SBA rules. Contact
the SBA to see if your company qualifies, since the criteria vary by line of
business. There are two SBA export-oriented programs:
1. The International Trade Loan Program
Loans for exports available through this program are made by private
lending institutions with the SBA guaranteeing a portion of the loan. The SBA
can guarantee up to $1.25 million per loan, less the SBA’s guaranteed
portion of other loans outstanding to the borrower under the SBA’s regular
lending program.
Applicants for these loans need to show that either:
(1) the loan will allow the exporter to significantly expand existing
export markets, or
(2) the exporter is adversely affected by import competition.
2. The Export Working Capital Program
This program is designed to support pre-export financing of labor and
materials used in exporting goods and services, accounts receivable, extend
credit to overseas buyers, and/or credits used as performance bonds or payment
guarantees to foreign buyers.
Loans available through this program are made by private lending
institutions with the SBA’s guarantee. However, the SBA can guarantee no
more than 90 percent of the loan amount (or $750,000, whichever is less).
Small businesses which sell to domestic customers who, in turn, export also
quality.
SBA Contact:
- Tom Williams
- U.S. Export Assistance Center
- 365 Canal Street, Suite 1170
- New Orleans, LA 70130; tel: (504) 589-6702
- ext. 254; fax: (504) 589-2337
- Web site: www.sba.gov
- Email: tfwill@yahoo.com
EXPORT-IMPORT
BANK OF THE UNITED STATES (EX-IM BANK)
The Export-Import Bank (Ex-Im Bank) is an independent U.S. Goveniment
agency that helps finance exports of U.S. goods and services. Ex-Im Bank's
mission is to create jobs through exports. Ex-Im Bank provides a level
playing field by countering the export credit subsidies of other
governments. To qualify for Ex-Im Bank support, the product or service must
have at least 50% U.S. content.
Working Capital Guarantee Program
The Working Capital Guarantee Program (WCGP) encourages lenders to make
short term export working capital loans. Ex-Im Bank provides lenders a loan
guarantee that covers 90% of the loan's principal and accrued interest- (Ex-Im
Bank may provide a 100% guarantee under certain circumstances: Minority or
women-owned businesses; businesses located in economically depressed or
rural areas; environmental businesses.)
These loan facilities support exporters' pre- and post-export working
capital needs: to acquire inventory for export; to pay for direct and
indirect costs (e.g., design and engineering, labor and overhead) or for the
provision of export-related services ' to support letters of credit serving
as bid or performance bonds or payment guarantees, or warranty bonds (as
approved by Ex-Im Bank); finance foreign accounts receivable. The loan
facilities can also be used to support indirect exports.
Two Louisiana banks, Bank One of Louisiana and Hibernia Bank, have
Delegated Authority that enables them to complete transactions under the
WCGP without Ex-Im Bank's prior approval.
Export Credit Insurance
Exporters can insure their short-term (180 days or less) export credit
sales of U.S. goods and services against loss due to nonpayment. Export
credit insurance policies provide protection against failure of a buyer to
pay an obligation due to unforeseen commercial or political reasons.
Insurance is a powerful export marketing tool, enabling exporters to
increase sales by offering credit terms. Insurance is also a cost-effective
means to obtain working capital financing.
Ex-Im Bank insured receivables are more attractive than uninsured
receivables to financial institutions that may purchase the receivables or
include them as eligible collateral for lending. The insured party simply
assigns the insurance policy proceeds to the financial institution.
Small Business Insurance Policy
This is a short-term (up to 180 days) insurance policy designed to meet
the needs of smaller, less-experienced exporters. Typically, products
supported under this policy are spare parts, raw materials, and consumer
goods. Under the policy, Ex-Im Bank assumes 95 percent of the commercial
risk and 100 percent of the political risk involved in extending credit to
the exporter’s overseas customers. This policy is available to companies
which have an average annual export credit sales volume of less than $3
million for each of the last two fiscal years, and which meet the SBA
definition of "small business."
Short-Term Single Buyer Policy
This policy offers 90 percent to 100 percent coverage for both political
and commercial risks for single or repetitive export sales to a single
buyer. The policy carries no deductible and offers a reduced premium to
small businesses.
Medium Term Finance Programs
Ex-Im Bank can facilitate the financing of capital goods and related
services on transactions up to $10 million with repayment terms up to 7
years. Ex-Im Bank offers I 00% insurance policies and I 00% loan guarantees
on cross-border term loans to creditworthy foreign buyers. The most popular
of the programs is Medium-Term Insurance, which covers one or a series of
shipments to an overseas buyer. The insured party can be either the exporter
or the lender.
Ex-Im Bank Contacts:
- Kelly Kemp
- Business Development Officer
- Export-Import Bank of the United States
- 1880 South Dairy Ashford II, Suite 585
- Houston, Texas 77077-4746
- Phone: 281.721.0468
- Fax: 281.679.0156
- Email: kelly.kemp@exim.gov
- Web: www.exim.gov
Alternatively, Ex-Im Bank's "City/State Partners" in Louisiana
can also be contacted for information and assistance with Ex-Im Bank’s
programs.
Based in Lafayette, J. Maxime Roy Inc. is the only full-time active Ex-Im
brokerage firm located in Louisiana. This firm assists exporters with all
aspects of Ex-Im Bank’s export credit insurance policies and Ex-Im Bank’s
export working capital guarantee program. J. Maxime Roy also represents
private export credit insurance companies. Contact:
- Warren Bares
- J. Maxime Roy Inc.
- Tel: (800) 229-9344
- Fax: (337) 237-3282
- Email: wobares@bellsouth.net
OVERSEAS
PRIVATE INVESTMENT CORPORATION (OPIC)
In addition to its primary role of insuring U.S. investors in many
developing countries against political risks, OPIC provides financing through
direct loans and loan guarantees over the medium- to long-term to ventures
involving significant equity and/or management participation by U.S.
businesses in participating countries. OPIC does not offer financing of export
sales unrelated to long-term investments in overseas business. OPIC can lend
on either a coporate or project finance basis, with loans ranging between
$100,000 and $200 million.
OPIC’s loan guarantees are generally for large projects. However, OPIC’s
direct loan program is reserved for projects involving U.S. small businesses
and cooperatives. The agency can work with U.S. citizens, corporations,
partnerships, or financial institutions that are more than 50 percent
beneficially owned by U.S. citizens.
OPIC Contact:
- Joan Edwards, Director, Investment Services
- OPIC, 1100 New York Ave., N.W.
- Washington, D.C. 20527
- Tel: (202) 336-8621; fax: (202) 408-5145
- Web site: www.opic.gov
- Email: jedwards@opic.gov
THE EXPORT FINANCE MATCHMAKER
The U.S. Department of Commerce has established a website that provides
trade finance information for companies exporting products abroad. The Export
Finance Matchmaker (EFM) is designed to match exporters with sources of export
financing. The user simply fills out an online "Transaction Query"
to be matched with information already collected from financing/risk
mitigation firms. The site also provides a list of trade financing sources for
each state, information on risk mitigation products, access to an export
finance guide, and answers to frequently asked questions about export
financing. The website can be accessed at www.ita.doc.gov/td/efm.
LOUISIANA
BANKS WITH INTERNATIONAL DEPARTMENTS
- Bank One International Group
- William Cummins
- Vice President, Global Trade and Treasury
- Bank One International Group
- 201 St. Charles St. Avenue, Suite 1410
- New Orleans, LA 70170
- Tel: 504/623-8310; Fax: 504/623-8379
- Web site: www.bankone.com
- Email: Bill_C_Cummins@mail.bankone.com
-
- Hibernia National Bank
- Michael Conwell
- Senior Vice President and Manager, Int’l Banking
- Hibernia National Bank
- 313 Carondelet St. 12th floor
- New Orleans, LA 70130
- Tel: (504) (504) 533-2329; fax: (504) 533-5212
- Web site: www.hiberniabank.com
- Email: MConwell@hiberniabank.com
-
- Whitney National Bank
- Robert Chamberlin
- Senior Vice President and Manager, Int’l Department
- Whitney National Bank
- 201 Camp St.
- New Orleans, LA 70160
- Tel: (504) 586-7305; fax: (504) 619-4158
- Web site: www.whitneybank.com
- Email: rchamberlin@whitneybank.com
