ADFA EXPORT FINANCE OFFICE
The ADFA Insured Export Program was designed to assist small service companies, manufacturers, and agri-businesses in obtaining Export Credit Insurance to cover unsecured sales to approved foreign buyers. By protecting foreign receivables from commercial and political risks, Arkansas Exporters are able to offer attractive credit terms to foreign buyers, and meet or beat foreign and domestic competition to international sales.
There is no longer a minimum 50% US content requirement for medium term support but Ex-Im Bank does request a description of the transaction in a Content Report and further explanation of foreign items supported in an annual Cause Report. Cover is still limited to the lesser of 85% of the Net Contract Price, or the U.S. Content or $10 million unless Ex-Im Bank permits inclusion of Local Costs or premium is included in the financing or a reinsurance agreement is used to cover ineligible foreign content.
Ex-Im Bank now permits Local Costs to be covered in certain circumstances, typically projects involving installation.
ADFA can also assist in securing bank financing for foreign receivable insured under the Ex-Im Bank Umbrella Policy. Insurance coverage is assignable to local lenders and may be used as collateral to finance the insured receivables.
One of the principal uses of the Export Finance Office is through the City/State Program of the Ex-Im Bank. This Pre-Shipment Financing program can finance the purchase of raw material or inventory needed to fulfill an export sale. Since it is solely for use in an export sale, the exporter is not forced to utilize resources dedicated to domestic sales.
Qualifying for Pre-Shipment Financing is made quick and easy. ADFA packages and performs the necessary credit analysis on applications for a 90% guarantee from Ex-Im Bank. ADFA's role as packager and analyst reduces the processing time at Ex-Im Bank and as a result, applications receive a response within ten days of receipt. The guarantee allows the exporter to aggressively seek out export opportunities knowing they can finance these sales.
FOR MORE INFORMATION ABOUT THE ADFA EXPORT FINANCE OFFICE CALL CHUCK CATHEY, ADFA EXPORT FINANCE OFFICER AT 501-682-5906.
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