# Presentation: 200122

## WORKING CAPITAL GUARANTEE PROGRAM

***Clean Technology Exports Conference***
- Irvine, CA
- November 14, 2006

## Basic Program Parameters

- Helps small and mid-size exporters obtain  financing to produce good/services for export
- Provides a 90% guarantee of repayment (prin. & int.)
- Covers Exporter Performance risk

**Note:**** Provides no protection to exporter                             **
**against non-payment by foreign buyer **

## Use of Financing

**Labor / Materials / Overhead**
** **

**LCs, Bid & Perfomance Bonds**

**Warranties**
**&**
**Retainages**

**Paying off **
**existing lines**

## WCGP (Con’t.)

- Loan structure:
- Transaction-Specific Facility;
- Transaction-Specific Revolving Facility; or
- Revolving Line of Credit
- Term generally up to 1-year, renewable
- Loan supports advances made against export-related inventory and foreign A/Rs:
- Up to 75% advance rate on inventory
- Up to 90% on foreign A/Rs

## WCG increases borrowing ability.

## WCGP-Collateral Requirements 

- Disbursements must be 100% collateralized
- Primary Collateral
- Export-related inventory
- Export-related accounts receivable
-   Secondary Collateral
- All other business assets
- Collateral Enhancements
- Personal guarantees required
- Export credit insurance or L/Cs may be required
*    *

## WCGP:  Eligibility Criteria

- Business operations in the U.S.
- U.S.-made product (minimum 51% U.S. content)
- Types of Exporters:
- Manufacturers
- Trading companies
- Service companies
- Reasonable assurance of repayment
- Minimum 1-year operating history
- Positive net-worth
- Debt service ability

##   WGCP:   Industry Comparison of Financial Ratios	

- Must meet or exceed the industry _Lower_ Quartile for 4 out 7 of the following ratios:
- Current Ratio
- Net Sales / Total Assets
- Debt to Worth
- Net profit+Dep, Dep & Amort / CMLTD
- EBIT / Interest
- Cost of Sales / Inventory
- Sales / Accounts Rec.
- 	_*Note*_: Borrowers who meet or exceed the industry’s _Median_ Quartile qualify for reduced Facility Fee.

## WCGP:  Fees

- Application Fee:     $100
- One year Facilities:
- Standard Facility Fee:   	1.50% p.a.
- Reduced Facility Fee:	1.00% p.a.
- Six months Facilities:
- Standard Facility Fee:	0.75% p.a.
- Reduced Facility Fee:	0.50% p.a.
- Interest Rate: 	 Determined by Lender
-     Borrowers who have _100%_ of their foreign A/Rs insured or covered by a L/C also qualify for reduced Facility Fee.

## WCGP Delegated Authority Levels 

- Community: $1 million per Borrower / $10 million aggregate for the Bank
- Basic: $2 / $25
- Medium: $3.5 / $50
- High: $5 / $75
- High Plus: $7.5 /  $100
- Super + Fast Track: $10 per Borrower / $150

## Application Information

**Management**
- Experience/Education
**Company history**
- Background
- Export experience
- Product / Services
**Credit history**
- Bank references
- Supplier references
- D&B

**Financial**
- 3 years financial statements
- Interims
- Receivables/payables aging
- Projections
**Transaction info.**
**Owners**
- Financial statements
- Tax returns

## For More Information

- Call Ex-Im Bank’s Regional Office near you:
- Newport Beach: 949-660-1341
- San Francisco: 415-705-2285
- San Diego: 619-557-7091
- 			www.exim.gov