Financing is often critical for securing or completing an export contract. Terms offered by commercial banks are not always sufficient to meet the needs of U.S. exporters. Non-payment by foreign buyers, caused by commercial or political risks, can also be a serious concern for U.S. exporters. The Overseas Private Investment Corporation (OPIC), the Export-Import Bank of the United States (Ex-Im Bank), the U.S. Department of Agriculture (USDA) and the Small Business Administration (SBA) offer programs such as the ones below that may help RE&EE exporters overcome these obstacles. Some programs also streamline the application process or provide special terms for RE&EE exporters.
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- Working capital loan guarantees (SBA, Ex-Im Bank) – enable exporters to finance materials, labor, and overhead to produce goods or services for export.
- Other export loan guarantees (USDA, SBA, Ex-Im Bank) – provide U.S. government-backed guarantees for commercial banks that make international loans.
- Project and structured finance through direct loans (Ex-Im Bank) – involves long term arrangements for funding large U.S. investments that emphasize exports in both developed and emerging markets, assessed project cash flows or corporate balance sheet risk. They include Renewable Express, a new Ex-Im Bank initiative to meet the increased demand for financing of small solar and wind power transactions.
- Export credit insurance (Ex-Im Bank) – enables U.S. exporters to offer short- and medium-term credit directly to their customers during the pre-and post-shipment phases.
- Project finance through direct loans and loan guarantees (Ex-Im Bank, OPIC) – provides medium- and long-term financing through direct loans or loan guarantees for large- and small-scale RE&EE projects involving U.S. investors in emerging markets. It includes Renewable Express, a new Ex-Im Bank initiative to meet the increased demand for financing of small solar and wind power transactions.
- Political risk insurance (OPIC) – is used to mitigate political or sovereign risks for U.S. investors, operators, and lenders (e.g., expropriation, political violence, currency inconvertibility, and breach of contracts with foreign government-owned entities, such as power purchase agreements and concessions) associated with doing business in emerging markets.
For small- and medium-sized enterprises that are new to exporting, more information can also be found in Trade Finance Guide: A Quick Reference for U.S. Exporters, available in PDF format.
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