EXIM emergency measures provide enhanced financial support counter Covid-10 liquidity crisis
The following were created four new, time-limited emergency measures that will temporarily expand the types of financing EXIM can provide as part of the U.S. government’s efforts to address and mitigate the economic crisis in the coming months.
The emergency measures will be in place for one year from May 1, 2020, and EXIM currently has about $80 billion available under its $135 billion overall financing cap that could be deployed for these emergency measures as well as regular business. These measures may be of interest to the members who are seeking ways to continue trade and investment links with the United States despite the liquidity strains due to the COVID-19 pandemic.
Please see the attached fact sheets for details. In brief:
Bridge Loan Product: a new EXIM financial product available to foreign borrowers for an initial period of one year that gives borrowers the option to extend financing for purchases of U.S. products.
Supply Chain Financing Guarantee:
EXIM currently provides a 90 percent guarantee to a participating lender that purchases accounts receivable from suppliers of an approved exporter. The change temporarily waives the previous requirement that transactions include small business involvement in 50 percent of the supply chain and allows EXIM to finance the distribution of U.S. products through foreign affiliates, which in turn sell the products to foreign buyers.
Working Capital Guarantee:
This product facilitates loans to U.S. businesses that export over the term of the loan. EXIM will now temporarily expand its financing beyond only export-related inventory to all of the borrower’s inventory that could potentially be exported, which will increase the eligible collateral for an EXIM guarantee.
Pre-Delivery / Pre-Export Financing:
EXIM currently allows periodic disbursements for pre-export payments to U.S. manufacturers during the manufacturing process when EXIM is providing the medium- or long-term financing associated with the export. EXIM will now be able to provide pre-delivery financing even when it is not providing the long-term financing for a one-year period.