News

United Pacific Bank, City of Industry, CA, is the first community bank to use a new Export-Import Bank of the United States (Ex-Im Bank) program that finances small businesses' export-related costs, helping them sell their products in foreign markets. A United Pacific $500,000 working capital loan guaranteed by Ex-Im Bank — the first transaction under Ex-Im Bank's newCommunity Delegated Authority Lender Program — is enabling Agri Pacific, Inc., a smallRiverside, CA, wholesaler, to expand sales of irrigation systems, fertilizer and other golf course products to Pacific Rim countries.

The Community Delegated Authority Lender Program is offered under Ex-Im Bank's Working Capital Guarantee Program, which guarantees working capital loans from lenders to finance pre-export costs of small and medium-sized businesses. Under the new program, qualifying community bank lenders may commit Ex-Im Bank's working capital guarantee, without prior Ex-Im Bank approval, on individual transactions of up to $1 million, and for a total of up to $10 million per institution. This delegated authority, available to qualified lenders with no previous Ex-Im Bank experience, speeds up the approval process and contains a generous fee sharing arrangement for the lender.

The Ex-Im Bank program is an excellent tool for us to develop new customers who previously had been self-financing and thus unable to expand their exporting business with Asia and other global regions, said Richard M. Gill, executive vice president and chief credit officer of United Pacific. We already have new prospects interested in the program.

Large foreign customers want credit, said Toby Sanders, president of Agri Pacific, a family-owned business located 60 miles east of Los Angeles. Several banks turned us down when we applied for export financing, saying they were unwilling to finance foreign receivables. Then Ex-Im Bank's Long Beach, California office introduced us to United Pacific Bank, which could provide the financing we needed with an Ex-Im Bank guarantee and export credit insurance. Now we are starting to get more and larger orders. We have 11 full-time employees and, with the increased business, expect to add another three people within the next year and a half, and move into a larger facility. This growth also is benefitting our U.S. suppliers.

In addition to the working capital loan, Agri Pacific obtained an Ex-Im Bank short-term comprehensive multi-buyer export credit insurance policy to extend credit terms to foreign buyers.

By using the insurance and its delegated authority under the Working Capital Guarantee Program, United Pacific can be more aggressive in supporting Agri Pacific by advancing 75% against inventory and 90% against foreign accounts receivable. The resulting larger loan authorization is 90% guaranteed by Ex-Im Bank, allowing United Pacific to have a larger line outstanding with less risk.

I had been skeptical of government programs before working with Ex-Im Bank, said Sanders. This program definitely has changed my perspective.

Agri Pacific's turf maintenance products comprise an industry sector in which the United States leads, according to Sanders: Through this program, I believe we can tap the enormous potential of the export market. We plan to expand from Asian markets to the Middle East, Central and South America, Africa and Southern Europe.

Ex-Im Bank's Working Capital Guarantee Program, supported by almost 100 lenders with delegated authority, expects to do about $500 million in guarantees this fiscal year. For more information, please contact Jerry Solomon, 202-565-3904 or gerald.solomon@exim.gov.

Ex-Im Bank is an independent US government agency that helps finance the sale of US exports to developing markets throughout the world by providing loans, guarantees, and insurance. In fiscal year 1999, Ex-Im Bank helped to finance nearly $17 billion of U.S. exports worldwide.