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VALET Webinar: Utilizing U.S. Export Finance Programs
Wednesday, November 14, 20122:00 p.m. to 3:30 p.m.
VALET Webinar: Utilizing U.S. Export Finance Programs
Agency Introductions
•Bill Houck, Regional Manager (DC ,VA, WV, MD, DE, PA), Export Solutions Group, Office of International Trade, United States Small Business Administration (SBA)
•Leila Afas, Director, Export Promotion, United States Trade and Development Agency (USTDA)
•Michael Jackson, Director, City/State & Trade Association Partners, Export-Import Bank of the United States
•Brian O’Hanlon, Director and Coordinator, Business Development Insurance, Overseas Private Investment Corporation (OPIC)
Panel Questions (Session open to audience questions and input)
Bill Houck, Regional Manager(DC,VA,WV,MD,DE,PA)
Export Solutions GroupOffice of International Trade
william.houck@sba.gov+1 202-557-4063
Export Loan Guarantee Programs
SBA
Ex-Im BankUS
CommercialService(USCS)
US Export Assistance Center (USEAC)
USCS- Market analysis-Match making-Buyer due diligence
SBA-Export activity working capital-Transaction working capital-Fixed asset and real estate term loans
Ex-Im Bank-Export working capital-Credit insurance
US Export Assistance Center
Start: US Commercial Service assists in originating export sales
To
Finish: SBA and Ex-Im assist in financing export sales, turning an order into a completed export sale
Export Express– 90% guarantee for amounts up to $350,000 (for up to 7 years)– 75% guarantee for amounts between $350,000 and $500,000 (for up to 7 years)– Lender uses its own loan approval process and documents– For financing of inventory, accounts receivable and export development activities
Export Working Capital Program (EWCP)– 90% guarantee for amounts up to $5,000,000– Use of funds similar to Export Express
International Trade Loan Program– 90% guarantee for amounts up to $5,000,000– For working capital term loans for financing and refinancing of fixed assets used for
exporting (loan tenures up to 10 years for plant & equipment and 25 years for real estate)
SBA Export Financing Programs
The Export Express program is perfect for companies needing working capital to jump start their export sales.
– 90% guarantee for amounts up to $350,000 (for up to 7 years)– Lender uses its own loan approval process and documents– Loan proceeds can be used for any export promotion related activity, including but not limited to;
• export related activities; export development expenses, such as brochure translation or participation in a trade show
• transaction-specific financing of export deals, including standby letters of credit• general lines of credit for export purposes• term loans for permanent working capital, machinery and equipment, or real estate
– Finance purchase orders, inventory and account receivables
Funding Entire Export Business
Developing an Export Business Plan– www.sba.gov/exportbusinessplanner
•A downloadable tool to save and customize •How to determine your export readiness •Training and counseling information •Worksheets for global market research •Financing information and options •Customizable Export Business Plan and Marketing Plan templates •Helpful resources for exporters •Glossary of Export Terms •And more!
SBA Export Business Planner
Technical Information for the bank• AR advance rate is 80% (90% for L/Cs or insured AR)• Inventory advance rate is 75%• Indirect export transactions are eligible• Advances against purchase orders allowed (Ex-Im does not)• No minimum underwriting ratios (Ex-Im has several)• Military products are eligible (not at Ex-Im)• Refinancing is allowed• ABL and similar monitoring fees allowed under EWCP• Robust secondary market (premiums can exceed 10%)
Bill Houck, Regional Manager(DC ,VA, WV, MD, DE, PA)Export Solutions Group
Office of International Tradewilliam.houck@sba.gov
+1 202-557-4063
www.ustda.gov
Opening Markets, Generating
ExportsU.S. Trade and Development Agency
Leila Aridi AfasDirector for Export Promotion
November 14, 2012
www.ustda.gov
Mission Statement
USTDA helps companies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies
USTDA links U.S. businesses to export opportunities by funding project planning activities, pilot projects, and reverse trade missions while creating sustainable infrastructure and economic growth in partner countries
www.ustda.gov
National Export Initiative
Increase U.S. exports to $3.14 trillion by 2015
Response to the National Export Initiative:• Launched the
International Business Partnership Program
• Increased Trade Advocacy
President Obama Announces Export Promotion Cabinet as part of the National Export Initiative
www.ustda.gov
Small Businesses
Foundation of the U.S. Economy
• Over 90% of all contracts with USTDA are signed with SMEs
• 44% of contracts awarded under USTDA grants are won by SMEs
www.ustda.gov
USTDA Program Activities
International Business Partnership Program
• Reverse Trade Missions
• Conferences• Workshops
Project Development Program
• Feasibility Studies• Pilot Projects• Technical Assistance
Matching U.S. Commercial Interests with Development Opportunities
www.ustda.gov
International Business Partnership ProgramReverse Trade Missions:
USTDA brings foreign project sponsors to the United States pending upcoming procurements to observe the design, manufacture, and operation of U.S. products and services.
www.ustda.gov
International Business Partnership ProgramConferences/Workshops:
USTDA organizes these sector or region-specific events to connect U.S. firms with foreign buyers. They are designed to highlight upcoming projects overseas, as well as showcase U.S. goods and services.
www.ustda.gov
Project Development Program
Feasibility Studies:
USTDA-funded and U.S.-led feasibility studies link foreign project sponsors with U.S. businesses at the critical early stage of project development. Analysis includes:
• Technical• Financial• Legal• Environmental• Lifecycle costing
www.ustda.gov
Project Development Program
Pilot Projects:
USTDA-funded pilot projects demonstrate the effectiveness of commercially proven U.S. technologies and equipment in the foreign buyer’s setting.
www.ustda.gov
Project Development Program
USTDA advances economic development in partner countries by funding technical assistance that:•Supports legal and regulatory reform related to commercial activities and infrastructure development;•Establishes key industry standards ; and•Opens other market activities
www.ustda.gov
Small Business Success
• USTDA funded a pilot project to test NTELX’s traffic coordination system at the Port of Aqaba in Jordan
• Jordan’s Ministry of Transportation awarded a contract directly to NTELX
• NTELX is working with countries across the region on similar projects
www.ustda.gov
USTDA Funding Criteria
USTDA evaluates projects based on the following criteria:
• Developmental priority in the host country
• Likelihood of success receiving implementation financing
• Mutual benefits for the United States and partner country, including commercial opportunities for U.S. firms
www.ustda.gov
Contact USTDA
U.S. Trade and Development Agency
1000 Wilson BoulevardSuite 1600Arlington, VA 22209
Telephone: (703) 875-4357
Fax: (703) 875-4009
Website: www.ustda.gov
www.Facebook.com/USTDA
www.Twitter.com/USTDA
Export-Import Bank of the United States
What is Ex-Im Bank?
The official Export Credit Agency (ECA) of the U.S. Government
Self-sustaining and independent
Established in 1934 Headquarters in D.C. Network of regional offices*
Mission: Assist in financing the export of U.S. goods and services to international markets.
Export-Import Bank of the United States
Ex-Im Bank Products Make a Difference
▪ Minimize risk
▪ Level the playing field
▪ Supplement commercial financing
Export-Import Bank of the United States
We Support a Variety of Industries
▪ Manufacturing
▪ Construction Equipment
▪ Medical Equipment
▪ Mining
▪ Power-generation
▪ Aircraft and Avionics
▪ Services
▪ Renewable Energy
▪ Agribusiness
▪ Wholesale/Retail
▪ Oil
Export-Import Bank of the United States
Ex-Im Bank Financing Covers the Spectrum
Pre-Export Financing
Post-Export Financing
Working Capital
Guarantee
InsuranceGuarantees
Direct Loans
Export-Import Bank of the United States
NEED SOLUTION
Extension of Credit
Working Capital Guarantee
Funds to Fulfill Orders
Buyer FinancingMedium- and Long-Term
Insurance & Loan Guarantee
Receivables Insurance
How Can Export Import Bank Products Assist You?
Export-Import Bank of the United States
Working Capital Guarantee
▪ Funds to pay for raw materials, labor, supplies, etc.
▪ 90% guarantee to lenders for export-related working capital loans
▪ Advances are supported by export-related:
– Inventory up to 75%
– Receivables up to 90%
▪ Transaction specific or revolving loans
Export-Import Bank of the United States
Short-Term, Accounts Receivable Insurance Protects U.S. exporters up to 95% against non-payment by foreign buyers due to:
– Commercial Risks– Political Risks
Allows exporters to offer competitive credit terms to foreign buyers
– Generally up to 180 days, some 360 day terms
– $0.50 per $100 to $1.50 per $100
Obtain additional financing
Multi-Buyer or Single-Buyer. With experience, exporter is given authority to set Discretionary Credit Limits for buyers
Export-Import Bank of the United States
Global Credit Express (GCE)
▪ Newly launched product for small businesses
▪ Financing for business of exporting, not just specific export
▪ Revolving credit line
▪ Up to $500,000 for 6-12 months
▪ Streamlined application process
Export-Import Bank of the United States
Buyer Financing at Competitive TermsFor international buyers purchasing U.S. capital equipment and services:
▪ 85% financed, 15% cash down payment
▪ Medium-term
– Repayment typically up to 5 years and amounts up to $10 million
▪ Long-term
– Greater than 5 years and over $10 million
Export-Import Bank of the United States
Just A Few Restrictions
▪ Military Exports (exceptions apply)
▪ Foreign Content
▪ Restricted Countries (CLS)
Export-Import Bank of the United States
For More InformationCall the Ex-Im Bank Regional Office near you:▪ New York: 212-809-2650 (Northeast / Mid-Atlantic)
▪ Miami: 305-526-7436 (Southeast)
▪ Atlanta: 404-897-6082 (Southeast)
▪ Chicago: 312-353-8081 (Midwest)
▪ Minneapolis: 612-348-1213 (Midwest)
▪ Detroit: TBD* (Midwest)
▪ Houston: 281-721-0465 (Southwest)
▪ Dallas: 214-551-4959 (Southwest)
▪ Seattle: 206-728-2264 (West)
▪ Newport Beach: 949-660-1341 (West)
– San Francisco: 415-705-2285
– San Diego: 858-467-7035
WEBSITE: www.exim.gov
Export-Import Bank of the United States
Ex-Im Bank Partners
Additional resources and assistance in applying for Ex-Im Bank products are available from:
▪ Insurance Brokers (see list on www.exim.gov)▪ City / State Partners (see list on www.exim.gov)▪ Delegated Lenders (see list on www.exim.gov)▪ US Export Assistance Centers (USDOC and SBA)
Export-Import Bank of the United States
For More Information
Michael K. Jackson, MBA, CGBPDirector, City/State Partners
Export-Import Bank of the United States811 Vermont Avenue, N.W.
Washington, D.C. 20571Phone: 202 565-3479
Fax: 202-565-3930Email: michael.jackson@exim.gov
Overseas Private Investment CorporationOverseas Private Investment Corporation
An Agency of the U.S. Government
Overseas Private Investment Corporation 41
Introduction to OPICIntroduction to OPIC
• U.S. Government’s Development Finance Institution established in 1971
• OUR MISSION: Facilitate and support U.S. private investment in developing countries and emerging markets.
•Helps U.S. companies enter, grow, and compete in the global marketplace•By supporting investments, generates U.S. exports and U.S. jobs•Catalyzes sustainable economic development in foreign markets
• WHAT WE OFFER: A suite of financial products that help U.S. companies enter international markets where private capital may be limited or unavailable.
• HOW WE RAISE THE BAR: U.S. best practices for environmental safeguards and worker/human rights.
• HOW WE’RE FUNDED: OPIC operates at no net cost to U.S. taxpayers and has made a profit consecutively for 34 years, including $269 million for the 2011 fiscal year.
Overseas Private Investment Corporation 42
Where We Work - 150+ CountriesWhere We Work - 150+ Countries
Our Clients and Alliances
Current Clients Strategic Alliances
OPIC partners with other U.S. government agencies and international partners to provide financing and risk mitigation products to a wide range of clients
― Departments of State, Commerce, and Treasury
― USAID & USTDA― Ex-Im Bank and SBA― Millennium Challenge Corp.
― IFC and MIGA― Regional Development Banks
(EBRD, IDB, ADB, EBRD)― Bilaterals (CDC, FMO, DEG,
Proparco, DFID
― Chambers of Commerce― AmChams― NGOs ― Financial Institutions
US Gov’t
Development Finance
Institutions
Other Partners
Multinationals and Small/Medium Businesses
Nonprofits and Impact Investors
43
Overseas Private Investment Corporation 44
OPIC Political Risk InsuranceOPIC Political Risk Insurance
• PRI covers acts of political violence; expropriation; and currency inconvertibility (aka, currency conversion and transfer)
• Protection for different types of U.S. exposure: equity, debt, leases, performance/advance payment guaranties, contracts with governments, etc.
• Coverage is long-term, typically not less than three years, up to 20 years for equity, longer for other types of investments such as long-term debt
Investor Eligibility and Conditions of InsuranceInvestor Eligibility Terms and Conditions of Insurance
• U.S. Citizens
• Corporations established in the U.S. and more than 50% owned by U.S. citizens or corporations
• Not-for-profits established in the U.S.
• Corporations established outside the U.S. and more than 95% owned by U.S. citizens or corporations
• Other foreign entities that are 100% U.S.-owned
• Eligible Investors
• 20+ year coverage (3 year min.)
• Coverage of up to $250 million per project
• Up to 90 % of investment (10% self-insurance) for equity
• 100% coverage for commercial bank loans or leases (from unrelated third parties)
• Premium rates fixed for full term of coverage
Coverage for Various Forms of Investment
Investment Form of Investment/Exposure % Covered
Equity Equity, including retained earnings, subordinated debt 90%
Debt Bank loans, bonds, and capital or operating leases from third party financial institutions
100%
Assets Tangible property, including consigned equipment 90%
Private Contracts
Contracts among private parties to provide services, including construction, procurement, management, technical services, “know how” or franchise agreements
90%
Contracts with Foreign Governments
Contracts with a foreign government agency or company:- Bid bonds or guaranties , including advance payment, performance, warranty or customs bonds -Tangible assets used to perform the contract- Disputes that arise, including non-payment
90%
90%90%
Overseas Private Investment Corporation 46
Coverage Tailored by Type of Project and Special Risks
Type of Projects & Risks Specialized Forms of Coverage
Infrastructure, including power, airports, ports, railways, etc.
- Creeping expropriation, including breach of contract, denial of justice, arbitral award default for long-term purchase or supply agreements with government owned and controlled companies.
Renewable Energy Infrastructure, including solar, wind, hydro, etc.
- Loss of business income due to “regulatory risks” or breach of “feed-in tariff” contract.
Non-governmental and not-for-profit organizations, including emergency relief services or schools
- Loss of bank accounts, tangible property and extraordinary expenses (such as evacuation expenses or forced abandonment of assets)
Microfinance - Foreign government acts affecting microenterprise borrowers, partial expropriation (bank accounts), and local currency risks
47Overseas Private Investment Corporation
Overseas Private Investment Corporation 48
Terms for OPIC FinancingTerms for OPIC Financing
• Long-term financing (tenors from 3 to 20 years)
• Fixed interest rate available
• Accepts foreign collateral plus “project completion support”
• Finance from 50 to 75% of the total project cost
• Loans from $350,000 to $250 million
• Direct loans for projects involving U.S. small and medium –sized enterprises (SMEs):
• U.S. SME or U.S. citizen/permanent resident owns at least 25% of project shares; OR• Other significant U.S. participation (e.g., U.S. contractor, U.S. operator, U.S. franchise).• No U.S. procurement requirements.
Overseas Private Investment Corporation 49
I have a project. How do I learn more?I have a project. How do I learn more?
1. Review the website: www.OPIC.gov(Hint: Review Our Investor Screener)
2. Consult Small Business Guide:http://www.opic.gov/small-business
3. Discuss your project with OPIC:- info@opic.gov or +1 (202) 336-8400
4. Insurance: Complete Form 50 Finance: Complete Section1a of Form 115
5. Need assistance? Loan Originators: www.ednaccess.com
Overseas Private Investment Corporation 50
Contact DetailsContact Details
Brian O’HanlonDirector and Coordinator, Business Development
InsuranceOverseas Private Investment Corporation (OPIC)
1100 New York Avenue, N.W.Washington, D.C. 20527 U.S.A.
Tel: +1 (202) 336-8474Email: brian.o’hanlon@opic.gov
VALET Webinar: Utilizing U.S. Export Finance Programs
Bill HouckRegional Manager (DC ,VA, WV, MD, DE, PA)
Export Solutions GroupOffice of International Trade
Small Business Administrationwilliam.houck@sba.gov
+1 (202) 557-4063
Brian O’HanlonDirector and Coordinator
Business Development InsuranceOverseas Private Investment Corporation
brian.o’hanlon@opic.gov+1 (202) 336-8474
Michael JacksonDirector
City/State & Trade Association PartnersExport-Import Bank of the Unite States
william.houck@sba.gov+1 (202) 565-3479
Leila AfasDirector
Export PromotionUnited States Trade and Development Agency
Lafas@ustda.gov +1 (703) 875-4357
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