Supporting Your International Sales
Foreign Buyer Financing
JMR can help you and your foreign customer explore financing through banks and commercial lenders, using EXIM's Loan Guarantee or credit insurance, or possibly private-market credit insurance to help protect the bank / lender against the risk of nonpayment.
Discuss Your SituationFinancing Can Help Turn an Opportunity Into a Sale
Foreign buyers want to purchase your U.S.-made equipment and products, but might need financing. If they try to arrange financing in a bank in their country, interest rates in their country may be high and their bank would require collateral.
Instead of you requiring them to pay in advance or put up a letter of credit to buy their equipment or products, a more competitive option is to help them obtain financing from a U.S. lender. JMR works with you and your foreign buyer to arrange financing, with no recourse to your company as the exporter, typically backed by EXIM's Loan Guarantee or credit insurance on the bank's loan, or private-market insurance when necessary.
This structure can help you offer your foreign customer more competitive payment terms while allowing you, as the U.S. exporter, to receive payment in full at or before the time of export of the products.
Two Types of Foreign Buyer Financing
Short-Term Financing — Non-Capital Goods
For agricultural goods, raw materials, inventory, components, spare parts, industrial supplies and other eligible non-capital goods.
Examples:
Agricultural goods | Raw materials Inventory | Components | Industrial supplies
- 90-, 180- or 360-day financing terms
- Revolving credit facilities for repeat purchases
- Financing provided by a bank or commercial finance company
- Lender's risk protected by EXIM's Financial Institution Buyer Credit insurance or private-market credit insurance
Medium-Term Financing — Capital Equipment
For machinery, industrial equipment, power generation, construction equipment and other long-term capital assets.
Examples:
Construction equipment | Industrial machinery Power and energy equipment | Transportation equipment
Many capital-equipment transactions can have repayment terms up to five years, with longer terms potentially available — such as 7, 8 or 10 years — for qualifying transactions depending on size, useful life, country and applicable requirements.
- Competitive interest rates
- Multi-year repayment terms — many transactions up to five years; longer terms may be available for qualifying transactions
- U.S.-dollar financing
- Financing for up to 85% of the eligible contract amount, with the buyer generally making a minimum 15% cash down payment
- Little or no conventional collateral required, depending on the transaction
- Financing provided by a bank or commercial finance company
- Lender's risk protected by EXIM's Loan Guarantee or credit insurance, or private-market credit insurance
Who Actually Provides the Financing?
Bank or Commercial Lender
Provides the loan or other financing to the qualified foreign buyer.
Foreign Buyer
Borrows the funds and repays the lender over the agreed terms.
U.S. Exporter
Provides the U.S. equipment or products and receives payment in full at or before export.
EXIM or Private Credit Insurer
Provides insurance or a loan guarantee to protect the lender against nonpayment.
Why Consider Private-Market Credit Insurance?
Private-market credit insurance can be an effective alternative or complement to EXIM and may be a better fit in certain situations, such as:
U.S.-Content Requirements
EXIM has specific U.S.-content requirements. Private insurers do not have U.S.- content requirements.
Country Availability
EXIM may be closed or restricted for a particular country. Private-market coverage may be available when EXIM support is unavailable.
Potentially Lower Cost
Private-market insurance may be available at a lower premium depending on the buyer, country and term.
Greater Flexibility
A private insurer may offer a structure that better fits the lender, buyer or transaction.
JMR evaluates both EXIM and private-market alternatives to help identify the best solution for each transaction.
How a Medium-Term (Capital Equipment) Transaction Typically Works
Introduce the Opportunity
You introduce your foreign buyer and the proposed transaction to JMR. JMR and the buyer execute an Export Finance Advisory Agreement. JMR then begins working on behalf of your foreign buyer to arrange the requested financing.
JMR Reviews and Screens
We review the buyer, country, product, U.S. content and financial information, including the buyer's financial statements.
Identify Potential Lenders
JMR works with EXIM-approved banks and commercial lenders that may be interested in the transaction.
Lender Underwrites Buyer
The lender conducts its own due diligence and credit review of the foreign buyer.
EXIM or Insurer Approves
EXIM or the private insurer reviews and approves the transaction.
Loan Documents Executed
The lender and buyer execute the loan documents and the insurance or guarantee is put in place.
Goods Are Exported
You ship the goods and receive payment in full from the lender.
Buyer Repays Lender
The foreign buyer repays the lender over the agreed repayment term.
Typical Terms and Conditions
Eligible Goods
U.S.-made capital equipment and eligible non-capital goods
U.S. Content
Generally 50%+ U.S. content (EXIM); no U.S.-content requirement by private markets
Down Payment
Generally 15% minimum cash down payment
Financing Amount
Up to 85% of eligible contract amount
Repayment Terms
Up to 5 years for many transactions; longer terms may be available for qualifying transactions
Currency
U.S. dollars
Recourse to Exporter
Generally none
How JMR Can Help
Working with you and your foreign buyer from introduction through closing.
JMR has experience arranging foreign buyer financing for U.S. exporters across a range of industries and transaction sizes. We work with you, your foreign buyer, appropriate lenders, and EXIM or private insurers to help structure and close the transaction.
- Evaluate whether your transaction may qualify for EXIM or private-market financing
- Help you and your foreign buyer understand the process and requirements
- Identify and approach appropriate lenders and insurers
- Assist with the application and documentation process
- Work with the lender and insurer through approval and closing
- Provide ongoing support throughout the transaction
Have a Foreign Customer Who Needs Financing?
Talk with JMR about whether your transaction may qualify for foreign buyer financing.