World Trade - December 2008 - (Page 43)

says Diane Farrell, member, Ex-Im Board of Directors. “That’s because we can take a risk in emerging markets such as Vietnam, India and those in Central and South America that are attracting a lot of business.” Weldy-Lamont Associates, Inc., a 13-employee engineering ﬁrm in Mount Prospect, Illinois, engaged Ex-Im when it decided to bid for a $350 million rural electriﬁcation turnkey contract from the government of Ghana. The contract involved procuring equipment and services from U.S. suppliers. Thanks to Ex-Im’s backing of a $344 million loan, Weldy-Lamont Associates was able to overcome foreign competition and win the contract. “We’ll be contracting with U.S. suppliers from the Midwest to California, Florida, and Georgia,” says the company’s president, Patrick J. Hennelly. “This ﬁve-year project is going to help them immensely because normally they are suppliers to the housing industry, which is in a slump. This will help manufacturers avoid layoffs.” Ex-Im also assists SMMs with European transactions. “The goal is to provide the support necessary to give SMMs and banks a sense of conﬁdence,” Farrell says. Among one of Ex-Im’s popular services is its Letter of Interest (LI), a pre-export tool that helps companies obtain loans that facilitate the export of goods or services. These loans, made by commercial lenders and backed by Ex-Im’s guarantee, provide SMMs with the liquidity to accept new business, grow their international sales and compete more effectively internationally. “This is especially helpful if a company has never exported and/or wants to expand their business,” Farrell. “When the SMM is eager to expand and go into a foreign market, they can present their bank an Ex-Im guarantee so that banks feel they are taking less risk. In this tight credit market, this may make a big difference.” Ex-Im also offers Credit Insurance, a special product for small, ﬁnancially viable businesses that are new to exporting or have only occasionally exported. It can help increase an exporter’s international sales by extending competitive credit terms while minimizing risk. The insurance is particularly valuable as a risk mitigation tool to insure receivables against nonpayment; a marketing tool for extending competitive credit terms; and a ﬁnancial tool to arrange attractive ﬁnancing with the exporter’s lender by using insured foreign receivables as additional collateral. In addition, for the ﬁrst time Ex-Im provides Medium Term Export Credit Insurance, which delegates authority to certain lenders to perform special expedited procedures. This way financial institutions can support the sale of U.S. capital equipment, its installation and a complement of spare parts (if necessary) by insuring a company’s foreign receivables against losses. This protects U.S. sales to a single foreign buyer against the buyer’s failure to pay an obligation due to unforeseen commercial or political reasons. “It offers a longer tender for loan guarantees—generally up to five years after the goods arrive at the port of importation,” Farrell says. Exporting Tips from the U.S. Commercial Service • Dedicate top-level management and develop a clear export strategy. • Identify your market(s)— conduct research and a risk/ reward assessment. • Be patient and realistic when going international. Take a long-term approach and allow sufﬁcient time for due diligence. • Seek professional help from the U.S. Commercial Service, District Export Council, bankers, international legal ﬁrms, or freight forwarders. • Make sure your product is export ready (standards compliance, regulations, labeling, licensing, etc.). • Understand and select the best distribution channel for each country (do research on all potential distribution partners). • Create payment terms and conditions that meet the market’s needs/standards. You can offer terms to your foreign buyers. Meet your competitors head-on by using the EXIM Bank and SBA Export Programs. • Design your Website to be attractive and responsive to foreign buyers. Visit http://www.export.gov/sellingonline. • Take advantage of U.S. government export promotion services. Everything from export ﬁnancing, to market research to advocating for your products in overseas markets. These services are affordable and effective, regardless of the size of your company. With its network of ofﬁces across the United States and in more than 80 countries, the U.S. Commercial Service utilizes its global presences and international marketing expertise to help U.S. companies sell their products and services worldwide. For the nearest U.S. Export Assistance Center, visit www.export.gov Policies are also available to accommodate both single and repetitive sales for more sophisticated and bigger project up to $10 million. “We want to give business the kind of support that gives them a sense of conﬁdence when they visit lenders,” Ferrell says. “After all, in the end, it’s about retaining and growing jobs in the United States. That’s our primary mission.” WT Karen Thuermer regularly writes about trade and transportation from her base in Washington, D.C. For reprints of this article, please contact Cindy Williams at williamsc@bnpmedia.com or 610-436-4220 ext. 8516. 43 WWW.WORLDTRADEMAG.COM http://www.export.gov http://www.export.gov/sellingonline http://www.export.gov http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - December 2008

World Trade - December 2008 Contents The Promise of Peril The Current Reality with IP in China Supply Chain Watch Tradewinds Performance Partners: Awards of Excellence Managing With Mobility What 2009 Bodes for the Supply Chain Small Business Takes to Export Green is Here for Good Fast Fashion

World Trade - December 2008

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