STATEWIDE — You know the pendulum has swung when the government is backing loans that banks won’t touch.
Once upon a time, exporters could demand cash in advance or a letter of credit from foreign purchasers. Then came the credit crunch, spreading virally and globally. One source of solutions to the credit woes of international companies is the U.S. Export Import Bank, which has established a formal relationship with the Oregon Economic and Community Development Department to offer financing tools to the state’s traded sector.
As the official export credit agency of the federal government, Ex-Im has worked with Oregon companies for years, providing financing for bike trailer manufacturer Burley Design of Eugene, seed exporter Turf Merchants of Tangent, Freightliner and many others. The roster is expected to expand significantly now that banks are under pressure to improve their cash positions and reluctant to lend without compelling assurance they will be paid back.
A stamp of approval from Ex-Im Bank is as solid a guarantee as an exporter can get. “We’re backed by the balance sheet of the U.S. government,” says Jim Lucchesi, a San Francisco-based senior development director with the 350-employee federal agency. Lucchesi is working with OECDD to help exporters limit their risks and enhance their ability to borrow with loan guarantees, direct loans and several varieties of credit insurance.
“Credit insurance is part of the standard business model in Europe,” Lucchesi says. “The awareness about it is growing as more businesses look overseas for new markets.”
One company that has benefited from Ex-Im credit insurance is privately held Tualatin-based Wade Rain, which exports irrigation systems to Latin America. “It’s a program I would recommend to anyone who is exporting,” says Wade Rain president Ed Newbegin. “It makes the bank comfortable to have an insured receivable.”
Anything that gives the bank comfort is worth considering these days.