7 Reasons to Use the Export Import Bank of USA for Your Business
The Export Import Bank of the United States (EXIM) is a government agency that provides a variety of tools intended to aid the export of American goods and services. The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers. If you are an American exporter or looking to become one, you may benefit from using the services of EXIM. Here are seven reasons why:
1. EXIM can help you access new markets and customers.
One of the biggest challenges for exporters is finding and reaching new markets and customers. EXIM can help you overcome this challenge by providing you with information, guidance, and contacts in foreign markets. EXIM has representatives in more than 70 countries who can assist you with market research, trade leads, matchmaking, trade shows, and missions. EXIM also has a network of regional export finance centers across the U.S. that can connect you with local resources and partners.
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2. EXIM can help you secure financing for your exports.
Another challenge for exporters is obtaining financing for their exports. Many commercial lenders are reluctant or unable to provide financing for international transactions due to the risks involved. EXIM can help you overcome this challenge by providing you with loans, guarantees, and insurance that can enable you to obtain financing from your bank or other sources. EXIM can also provide direct loans to your foreign buyers to finance their purchases of your products or services.
3. EXIM can help you protect your exports from nonpayment and other risks.
Exporting involves various risks, such as political instability, currency fluctuations, regulatory changes, and nonpayment by foreign buyers. EXIM can help you mitigate these risks by providing you with export credit insurance that can cover up to 95% of your export sales against commercial and political risks. Export credit insurance can also enhance your cash flow by allowing you to offer credit terms to your foreign buyers and enabling you to borrow against your insured receivables.
4. EXIM can help you compete with foreign rivals.
Exporting is a competitive business, and you may face foreign rivals who have an advantage over you due to their government support or lower costs. EXIM can help you level the playing field by providing you with financing and insurance that can match or counter the terms and conditions offered by your foreign competitors or their governments. EXIM can also help you challenge unfair trade practices or subsidies that may harm your export opportunities.
5. EXIM can help you grow your business and create jobs.
Exporting can be a powerful engine for growth and job creation for your business. According to the U.S. Department of Commerce, in 2020, U.S. exports supported an estimated 10.7 million jobs, and exporters outperformed their non-exporting counterparts in terms of sales growth, profitability, innovation, and productivity. EXIM can help you tap into this potential by providing you with the tools and resources to expand your export sales and reach new markets.
6. EXIM can help you achieve your social and environmental goals.
Exporting can also be a way for you to contribute to social and environmental causes that matter to you. EXIM supports U.S. exporters who are engaged in sectors such as renewable energy, clean technology, health care, education, women’s empowerment, and small business development. EXIM also adheres to high standards of environmental and social responsibility in its operations and projects.
7. EXIM is easy to use and affordable.
You may think that using a government agency like EXIM is complicated or costly, but that is not the case. EXIM has simplified its processes and procedures to make them more user-friendly and accessible for exporters of all sizes and sectors. EXIM also offers competitive rates and fees that are based on the risk profile of each transaction and reflect market conditions.
The Export-Import Bank of the United States (EXIM) is a government agency that provides a variety of tools intended to aid the export of American goods and services. The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers. In this blog post, we will look at some statistical trends that show how EXIM is impacting the global demand in this industry.
EXIM’s Financing Volume and Impact
According to the EXIM’s annual report for fiscal year 2020, the agency authorized $16.8 billion in financing for U.S. exports, supporting an estimated 164,000 American jobs across 2,400 companies. Of this amount, $12.9 billion was for small business exports, representing 77% of the total authorizations. The report also highlights that EXIM supported $3.6 billion in exports to emerging markets, $1.4 billion in exports to sub-Saharan Africa, and $1 billion in exports to renewable energy and environmental sectors.
The report also shows that EXIM’s financing has a positive impact on the U.S. trade balance and the federal budget. In fiscal year 2020, EXIM generated $585 million in net income for the U.S. Treasury, bringing its total contributions over the past 25 years to $10.7 billion. Moreover, EXIM’s financing helped reduce the U.S. trade deficit by $6.8 billion in 2020, as every dollar of EXIM support leveraged $4 in U.S. exports.
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EXIM’s Competitive Advantage and Challenges
One of the main reasons why EXIM is able to support U.S. exports is that it offers competitive financing terms and conditions that match or counter those offered by foreign export credit agencies (ECAs). According to the EXIM’s competitiveness report for 2019, the agency matched or exceeded 90% of the foreign ECA activity that it encountered in its markets. The report also identifies some of the key advantages that EXIM has over its competitors, such as its flexible products, its customer service, and its environmental and social standards.
However, EXIM also faces some challenges that limit its ability to fully support U.S. exporters. One of these challenges is the lack of a long-term reauthorization from Congress, which creates uncertainty and instability for the agency and its customers. Another challenge is the increasing use of non-transparent and market-distorting practices by some foreign ECAs, such as tied aid, concessional financing, and local content requirements. These practices undermine the level playing field for U.S. exporters and make it harder for EXIM to match or counter them.
EXIM’s Future Outlook and Opportunities
Looking ahead, EXIM has some opportunities to increase its support for U.S. exports and enhance its role in the global market. One of these opportunities is the implementation of the Program on China and Transformational Exports, which was established by Congress in 2019 as part of EXIM’s reauthorization. This program aims to advance U.S. technological leadership and competitiveness by providing financing for U.S. exports that directly compete with China or support U.S. innovation in strategic sectors such as 5G, artificial intelligence, biotechnology, and renewable energy.
Another opportunity for EXIM is to expand its collaboration with other U.S. government agencies and international partners to promote a fair and rules-based system for international trade and finance. For example, EXIM can work with the U.S. Trade Representative, the Department of Commerce, and the Department of State to address unfair trade practices and enforce trade agreements. EXIM can also work with multilateral institutions such as the World Trade Organization, the Organization for Economic Cooperation and Development, and the International Working Group on Export Credits to harmonize standards and policies among ECAs.
EXIM is a vital tool for supporting U.S. exports and jobs in a competitive and dynamic global market. By providing financing that matches or counters foreign ECAs, EXIM helps U.S. exporters win sales and contracts that they otherwise might lose or not bid on. By implementing new programs and strengthening its partnerships, EXIM can also advance U.S. strategic interests and values in key sectors and regions.
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