The United States Export-Import (Ex-Im) Bank, originally established in 1945, is an independent agency that was created to help finance U.S. exports to industrializing and developing markets by providing loans, credit guarantees, and insurance. By 2000, the agency had supported an estimated $383 billion in U.S. exports since its inception.

The Ex-Im Bank ranks as one of the most viable sources of financing for small-and mid-sized exporters. For instance, an estimated 1,150 small businesses used Ex-Im Bank programs for the first time from fiscal years 1997 through 1999. In addition, small business transactions accounted for more than 80 percent of total approved transactions in each of those three years. This viability is underscored by the continued reluctance of many banks to make loans for international trade purposes, despite the growing consensus that international markets are a potentially lucrative new area for many small businesses to explore. "You've seen the statistics on the economic benefits of exporting," wrote Jan Alexander in Working Woman. "You've read the success stories about small companies that quadrupled their revenues through international sales. All you need is a little extra cash to get things started." But since "loan officers in the U.S. have a tendency to see nearly all foreign markets as unpredictable and all loans associated with foreign expansion as very risky," said Alexander, organizations like the Export-Import Bank and the Small Business Administration (SBA) "have a mandate to help American businesses each step of the way, offering instruction and support in everything from identifying viable foreign markets to closing and financing the deal." The Export-Import Bank confirms as much in its own words. "We want to ensure that no innovative small company loses the opportunity to make a foreign sale because it lacks working capital or competitive export financing." stated one Ex-Im executive in Business America.

Indeed, organizations such as the Ex-Im Bank are widely recognized as a valuable resource for small businesses that might otherwise be wholly muscled out of international markets by larger competitors. "Small business and middle market companies must be aware of the existence of export financing programs that can help them increase their export sales by providing access to competitively priced working capital financing," said William Easton in Business Credit. "Historically, small businesses and middle market companies have experienced a significant competitive disadvantage in obtaining working capital financing versus larger Fortune 500 companies." The programs maintained by the Ex-Im Bank are designed to address these competitive disadvantages.


The primary way in which the Ex-Im Bank aids small-and medium-sized U.S. exporters is through one or more of its financing programs. These are summarized as follows:

Working Capital Guarantee Program (WCGP). The Working Capital Guarantee Program, which is operated in conjunction with the SBA's Export Working Capital Program, assists small business exporters in obtaining the capital they need to purchase inventory or raw materials, market exports, or engage in manufacturing activities. The program guarantees 90 percent of the principal and interest on working capital loans extended by commercial lenders to eligible exporters, provided the loan is fully collateralized (through inventory, accounts receivable, or other means). The loan amount may be used for a variety of business purposes, including purchase of raw materials, purchase of inventory, or manufacturing expenses (including cost of labor, engineering, and other services).

Export Credit Insurance Program. The Export-Import Bank makes available credit insurance to qualified small businesses. This insurance, which may be obtained directly or via an insurance broker, consists of a wide variety of policies designed to protect businesses against losses incurred in developing countries, where commercial and political developments can trigger defaults. The program is available to businesses with up to $5 million in annual credit sales (an increase of $2 million over recent years), and includes reduced premiums on short-term policies for low-risk transactions. Specifically, this program 1) protects the exporter against the failure of foreign buyers to make payment because of national, political, and/or economic developments; 2) encourages exporters to offer international buyers competitive terms of payment; 3) gives exporters and their lending institutions greater financial flexibility in handling overseas accounts receivable (policies are assignable from the insured exporter to financial institutions).

Small Business Insurance Policy Program. The Export-Import Bank provides short-term (no more than 180 days) policies designed to address the unique credit requirements of smaller, newer exporters. Under the policy, Ex-Im Bank assumes 95 percent of the commercial and 100 percent of the political risk involved in extending credit to the exporter's overseas customers. "This policy frees the exporter from 'first loss' commercial risk deductible provisions that are usually found in regular insurance policies," stated the Ex-Im Bank. "It is a multi-buyer type policy which requires the exporter to insure all export credit sales. It offers a special 'hold-harmless' assignment of proceeds which makes the financing of insured receivables more attractive to banks."

Short-Term Single Buyer Program. This option is available to exporters who do not wish to insure all their short-term credit sales under a multi-buyer policy when they are in fact making single or multiple sales to the same buyer. The policy offers 90 percent to 100 percent coverage for both political and commercial risks of default, depending on buyer, term of sale, and type of product. It has no deductible, and small businesses are eligible for special reduced premiums.

Other notable programs offered by the Ex-Im Bank include: 1) Umbrella Policy—allows state agencies, export trading and management companies, insurance brokers, and other agencies to act as intermediaries between the Bank and their clients; 2) Medium-Term Insurance—comprehensive (100 percent) coverage available to exporters of capital goods or services in amounts of $10 million or less and terms up to five years; 3) Guarantees to Foreign Buyers—various loans and guarantees of commercial financing that can be extended to foreign purchasers of U.S. capital goods and related services; 4) Guarantees of repayment protection for private sector loans to buyers of U.S. capital goods and related services; 5) Programs Supporting Export of Environmental Goods and Services—This Ex-Im Bank offering supports export of environmental goods and services by providing short-term environmental insurance policies that feature no deductible and comprehensive coverage in the event of default; 6) Seminars and Briefing Programs—Available to members of the small business community, these discussions and seminars cover a variety of exporting topics.

For more information on these and other Ex-Im offerings, contact the bank's central headquarters in Washington, D.C., or one of its six regional offices across the United States.


Alexander, Jan. "Where the Money Is." Working Woman. December-January 1998.

Breaking into the Trade Game: A Small Business Guide. U.S. Small Business Administration, n.a.

Easton, William. "SBA and Ex-Im Bank Working Capital Guarantee Program." Business Credit. July-August 1997.

"Ex-Im Bank Programs: An Overview." Export-Import Bank, 2000.

Hoover, Kent. "Export-Import Bank of the United States." Washington Business Journal. January 26, 2001.

Sletten, Eric. How to Succeed in Exporting and Doing Business Internationally. John Wiley, 1994.

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