John A. Emens, Executive Director – Partner Development
CFS International Capital Corp
April 14th, 2010
UPS Headquarters
16th Annual Georgia Tech Global Business Forum
Wall Street Journal March 11, 2010
“A yawning gap has opened in the early
stages of the economic recovery between big
companies and small businesses with the
former enjoying access to credit and growing
global markets and the latter hurting badly
on both fronts.”
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..have a foreign buyer that wants credit terms
…export routinely, but your growth in foreign sales
is limited because of non-payment fears
…are losing export opportunities because you will
only accept an L/C or cash upfront
…can’t find a lender to finance your overseas
purchase orders
…are encountering cash flow problems due to
increased foreign sales
…have a buyer that needs several years to pay for
capital equipment
16th Annual Georgia Tech Global Business Forum
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First “Port of Call” – your existing commercial
banking relationship
* Your balance sheet is key to credit access
* Show some profit success
* Is there a limit to your banker’s “love”?
Help for Your Banker – And You
* Federal government programs
SBA or Ex-Im Bank supported working
capital guarantee programs
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16th Annual Georgia Tech Global Business Forum
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Export Express
* Up to $150k with guarantee of 85%
* Up to $250k with guarantee of 75%
* Use of proceeds: working capital,
inventory, equipment, buildings, trade
show participation, translation of
literature, website design, etc.
* Working capital: 7 years
* Fixed assets: up to 25 years
* Guaranty fee: 2-3%
16th Annual Georgia Tech Global Business Forum
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Export Express Requirements/Four Questions
1) have you been in business at least 1 year?
2) are you entering a new or expanding in an
existing market?
3) are you selling to an “approved” country?
4) is credit for onshore (U.S.) operations?
Add: Your anticipated export sales for 1st year
16th Annual Georgia Tech Global Business Forum
> SBA Export Working Capital Guarantee Program
* Up to $2 million w/ 90% guarantee for lender
* Guarantee fee .25% of guaranteed amount, if 12
months or less (typical)
> Ex-Im Bank Working Capital Guarantee Program
* No minimum or maximum (less than $250k is
unusual) – w/ 90% guarantee for lender
* Guarantee fee .75% (up to 6 months);
1.5% for 7-12 months
> Single transactions or revolving line of credit
16th Annual Georgia Tech Global Business Forum
Use of proceeds:
* to acquire inventory for export or to be
used to manufacture goods for export
* to pay the manufacturing costs of goods
for export
* to purchase goods or services for export
* to support standby L/Cs related to exports
* for pre-shipment working capital directly
related to export orders
* For post-shipment foreign a/r financing
16th Annual Georgia Tech Global Business Forum
Advance Rates – Both Programs
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75% against inventory and work-in-progress
85% against insured, foreign accounts
receivable
90% against Letter of Credit
>Ex-Im does not have a dollar value limit
>Ex-Im has over 50 lenders with delegated
authority that can immediately commit the
transaction
> Ex-Im does not require the debtor to be a
small business
> SBA does not have U.S. content or military
restrictions
> SBA has lower fees
16th Annual Georgia Tech Global Business Forum
What if your banker doesn’t work with the Feds?
Or feels that your requested credit is
“too small” for their bank?
>Export credit insurance can convince a lender to
back you
>Use your insured a/r to access credit
>Insured receivables can be financed through
assignment of the policy to the lender – without
losing control of your client relationship or the
receivable (this is not factoring)
>Ex-Im small business insurance costs
$.55/$100 of shipments, w/ premium paid the
month after shipment, no deductible
>Insurance costs can be passed on to the buyer
“Virtual” Cash Sales
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Advance rates of 90% for all of your eligible
insured foreign accounts receivable
Receive 90% of your invoiced amount the day
after shipment
Receive the balance of invoice, less accrued
interest, upon payment by your customer
Pricing – Prime +3% (Prime is currently 3.25%)
Facility fee – 1.25%
Example: A $100K invoice, paid in 60 days,
would net $98,972 – w/ $90k paid right away
Medium-Term Capital Equipment
Financing for Your Foreign Buyers
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Generally used for buyer financing of capital
equipment:
* 1 to 5 year repayment, exceptionally 7
years and < $10 million
* 15% advance payment, 85% financed
amount
* Cash sale for you, term financing for your
buyer, 100% U.S government guaranteed
loan for the lender
Contact Information
> SBA International Office – Atlanta
Ray Gibeau, Regional Manager
Export Solutions Group
404-897-6089
raymond.gibeau@sba.gov
> Ex-Im Bank - Southeast Regional Office
Maria Gutierrez, Business Development Officer
305-526-7436 x24 maria.gutierrez@exim.gov
> CFS International Capital Corp – Atlanta
John A. Emens, Executive Director – Partner Development
678-427-3229 jemens@xportmanager.com
Resource Access
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Preferred Lenders for the SBA Export Working Capital Guarantee
Program doing transactions in the Southeast: BB&T Bank, SunTrust Bank,
Regions Bank, Mercantile Bank, Fifth Third Bank, First American Bank and World Trade
Finance. Check with Ray Gibeau, SBA, for contact information
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Delegated Authority Lenders for Ex-Im Bank’s Working Capital
Guarantee Program: Go to www.exim.gov/about/partners/index.cfm. The list is
organized alphabetically by state.
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CFS International Capital Corp –
short-term working capital lines of credit
($100k-$500k+) secured by assignment of Ex-Im Bank short-term Ex-Im Bank export
credit insurance policy: www.xportmanager.com