Posted by: Norka M. Schell
The Export-Import Bank of the United States (Eximbank) is a United States government-chartered facility to promote the sale abroad of American goods, services, and commodities through insurance and finance programs.
Eximbank offers insurance, financing, and guaranties to exporters, their lenders, and the foreign buyers of American exports. Its numerous programs fit into four major categories:
1. Export credit insurance,
2. Direct loans,
3. Loans guaranties, and
4. Working capital guaranties.
Eximbank has greatly simplified its credit insurance program in recent years. As currently structured, the program provides foreign credit risk coverage to United States exporters and financing institutions.
Coverage is available for both political and commercial risks of default in payment. Political risks include adverse host government action, such as intervention in a transaction or license cancellation, and events beyond the buyer's control, such as war. Commercial risk covers a buyer's inability to meet a payment obligation due to financial difficulties. Political risk coverage may be purchased alone, but commercial risk coverage is available only in conjunction with political risk coverage.
Eximbank offers "single buyer" policies, covering a sale or sales to only one foreign buyer, and "multi-buyer" policies that extend coverage to a number of buyers in several countries. Under a multi-buyer policy, the U.S. party is required to insurer a reasonable spread or all of its export credit sales with Eximbank.
On short-term transactions (with repayment periods less than 180 days), the gross invoice value of the sale is insured. For longer terms, only the financed portion of the contract is covered. See International Trade, Second Edition by Paul H. Vishny
The Export-Import Bank of the United States (Eximbank) is a United States government-chartered facility to promote the sale abroad of American goods, services, and commodities through insurance and finance programs.
Eximbank offers insurance, financing, and guaranties to exporters, their lenders, and the foreign buyers of American exports. Its numerous programs fit into four major categories:
1. Export credit insurance,
2. Direct loans,
3. Loans guaranties, and
4. Working capital guaranties.
Eximbank has greatly simplified its credit insurance program in recent years. As currently structured, the program provides foreign credit risk coverage to United States exporters and financing institutions.
Coverage is available for both political and commercial risks of default in payment. Political risks include adverse host government action, such as intervention in a transaction or license cancellation, and events beyond the buyer's control, such as war. Commercial risk covers a buyer's inability to meet a payment obligation due to financial difficulties. Political risk coverage may be purchased alone, but commercial risk coverage is available only in conjunction with political risk coverage.
Eximbank offers "single buyer" policies, covering a sale or sales to only one foreign buyer, and "multi-buyer" policies that extend coverage to a number of buyers in several countries. Under a multi-buyer policy, the U.S. party is required to insurer a reasonable spread or all of its export credit sales with Eximbank.
On short-term transactions (with repayment periods less than 180 days), the gross invoice value of the sale is insured. For longer terms, only the financed portion of the contract is covered. See International Trade, Second Edition by Paul H. Vishny
