December 14, 2015
Export-Import Bank Reauthorized!
On December 4th, President Obama signed into law the reauthorization of the Export-Import Bank of the United States (EXIM Bank). EXIM Bank is the official export credit agency of the United States. It facilitates the export of U.S. goods and services by filling in the gaps in private export finance. EXIM Bank offers trade financing solutions to help American exporters compete for global sales. This is especially beneficial to small businesses.[1]
Due to the various risks involved when dealing with overseas markets, many private sector lenders are unwilling or unable to provide financing to exporters. EXIM Bank’s purpose is to fill this gap. EXIM Bank’s products and service offerings include export credit insurance, working capital guarantees, and guarantees of commercial loans to foreign buyers. EXIM Bank is backed by the full faith and credit of the United States. However, the bank’s charter requires that all of its transactions demonstrate a reasonable assurance of repayment, and EXIM Bank maintains a low default rate. Moreover, EXIM Bank has generated almost $7 billion more than its costs of operation over the past twenty years, helping to reduce the federal deficit.
EXIM Bank expects its online application systems and exim.gov to be fully operational no later than the close of business Tuesday, December 8th. EXIM Bank is prepared to accept and process applications for all levels of financing. However, transactions totaling more than $10 million require approval by the board of directors, and thus, must await Senate confirmation of members sufficient to reconstitute a quorum.
The reauthorization is effective until September 30, 2019.
[1] In 2014, nearly 90% of EXIM-authorized transactions supported American small businesses.
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