Access to Capital Forum

National Small Business Week 2015

Microloans & Revolving Loan Funds

Heather W. Fisher, Executive Director, Ozarks Small Business Incubator
Myles Smith, Manager of Member Services, Howell-Oregon Electric Cooperative, Inc.

Johnny Murrell, Executive Director, South Central Ozark Council of Governments (SCOCOG)

Crowdfunding
Jason Graf, CEO, CrowdIt

Jason Graf, CEO and co-founder

[email protected]
@CrowdItJason
@DontJustDreamIt
@417bizbroker
**crowdit (from any cell phone)

The Suit and the Dreamer

Local entrepreneur Jason Graf launched a local crowdfunding
platform, CrowdIt, where dreamers and mentors work together.

Owned/ Operated a Small Mortgage and Real

Estate Company
Business Broker for Murphy Business &
Financial
SCORE Mentor
JP Advisors - Operations/Capital Acquisition
- CrowdIt
- BYOP Build Your Own Pizza
- Auto Concierge
- BEO Now
Idea Guy / Creative Thinker
SERTOMAN

CEO & Co-Founder, CrowdIt.com

Business Broker, Murphy Business & Financial Corporation

Self-fund
Borrow
Friends and Family
Outside Investors
Accredited
Non-Accredited
Accredited Investors
10-12 Million Households in the US, out of 117
million
Test: $1M net worth (exclude home & related
debt); or$200K income last 2 years (or $300K
with spouse)

crowdfunding
Syllabification: (crowdfunding)
Pronunciation: /kroudfndiNG/

Definition of crowdfunding:
noun
the practice of funding a project or venture by raising many small amounts of
money from a large number of people, typically via the Internet:

An Internet EVENT that harnesses the power of your network!

Funds
Awareness
Feedback

Four Main Types of Crowdfunding

Donation Based

Donation Based

Passion

Emotion
A Cause
Civic Duty or Community Involvement
Expression

Think CauseMomentum.Org

Reward or Incentive Based

Pledge or contribute to receive something in return

Product
Recognition
Collaboration
Widget
1st Edition
Credits
Etc.

Bands, Film, Start-Ups, Inventors,

Tech, Apps, Gaming, etc

WHY?

Market Research
Demand
Proof of Concept
Pre-Sales
Marketing

10

Determine your Dream

Create a Plan
How much you need?
Full or Flexible
Determine Really Cool Incentives
Post Project to Site
Pitch
Video (115% more funding)
Pictures
Incentives / Levels
Pick time (15 to 75 days)
Rally the troops
Market, Market, Market!!!
Tier 1, Tier 2, Tier 3
Collect and fulfill promises.
Dream realized

side uncertain

In Need of Funding
According to the Federal Reserve, there are 27 million
businesses that need capital in some form.

23% of those businesses never even apply for funding because

of "fear of rejection."

The fears are justified in today's structure. About 50% of all

businesses that do apply for funding get shot down.

within this market.

Create The Pitch

Video
mandatory
show you are a real person (credible / trustworthy)
reason to stay on page
higher rate of funding / viral
address the Portal community / THANK YOU
CREATIVE
traditional talking head / finger puppets / demos / voice over / stop animations, etc
keep it simple
CALL TO ACTION!!
Pictures
Audio

Incentives
important to success / put in the work & thought
wide range of price points
$5 - $100 = small
EASY TO DISTRIBUTE
MP3s, digital still pics, acknowledgments on a website, thank yous, etc.
$150 - $500 = medium
often physical goods
t-shirts / product, etc.
$600 - $1,000 = large
$1,000+ = extra large
live, custom, special goods & services, or experiences
Meaning / value to your contributors
Unique / Special / Limited edition
Create a Goods Menu
Allow contributors to be a part of your project
Utilize your strengths / hobbies - get personal

Deliver on promises
Stay engaged
Invite them to continue the journey
get feedback
ask them to post on the rewards they receive

Celebrate Victory and

Capital!!!

Questions?

Managing Credit
Tracey Blaue, Consumer Credit Counseling Service

Gap Financing
Lisa Zimmerman, Justine PETERSEN

Coffee Break
Be back in 10-minutes!

Bootstrap Financing
Maximizing Benefits by Minimizing Risks
Raymond E. Williams, Williams Law Office LLC

Bootstrap Financing

Bootstrap Financing
Starting or financing a
company with little capital
using personal finances,
relationships, and
operating revenues of the
company

Sources of Bootstrap Financing

Savings
Credit Cards
Factoring of Accounts Receivable
Trade Credit
Customers Letters of Credit
Leasing
R/E Equity Loans
Friends and Family

Risks of Bootstrap Financing

Personal Risk
Agreements done without professional
assistance & documentation
Banks, Accountants, Attorneys
Friends and Family
Adhesion, non-negotiable, unfavorable terms
in Agreements
High Interest and Costs
Legal Risks

Avoiding the Risks

Understand the Agreement
Write it Down

Examples
1) Family & Friends
Gift, Loan, Investment
If an investment, what are the terms

ownership, vote, day-to-day decisions

manager salary / distributions
additional capital
dissolution of company
is the investment marital property?
what if someone dies?

LLC Operating Agreements

Missouri Revised Statute, 347.081.1
Operating agreement, contents--policy statement-enforceability, remedies.
347.081. 1. The member or members of a limited
liability company shall adopt an operating
agreement containing such provisions as such
member or members may deem appropriate,
subject only to the provisions of sections 347.010 to
347.187 and other law. The operating agreement
may contain any provision, not inconsistent with
law, relating to the conduct of the business and
affairs of the limited liability company, its rights and
powers, and the rights, powers and duties of its
members, managers, agents or employees. . . .

Examples
2) Loans
Security / Collateral
Promissory Note: Defines terms of
repayment and default
Security Agreement: Provides collateral for
the loan if case of default and defines the
terms in case of default
Generally, must be in writing if > 1 year
Avoids confusion over repayment, interest,
fees, and collections for both parties

Examples
3) Guarantors / Co-signers
Guarantor co-signs promissory note
After default, what happens lender takes
the Guarantors money but what happens to
the Guarantor?

Examples
4) Buy Sell Agreement with Seller Financing
New owner purchases business from Seller,
without bank credit & owner wants a
monthly income stream
Seller finances with monthly payments at
competitive interest
Buy-Sell Agreement but no Security
Agreement
Buyer decides to leave Missouri and defaults
on loan
Buyer sells all fixtures, equipment,
inventory and leaves the state

Examples
5) Leases
a) Software
Popular with software now especially with
the Cloud
What if it doesnt work right?
b) Equipment
Will you own it?
What if you dont want it?
Can you buy it?
What are the costs?

Personal Guarantees
Rare for a New Business to Not Face
Personal Guarantees for Financing
Often the case for Bootstrap Financing
Personal Credit Cards
Home Equity Loan
Leases
Loans
Friends and Family!
Goal of the business is to separate personal
asset liability from business asset liability
Legal Liabilities
Financial Liabilities

Tax Consequences
Im not an accountant, but I
encourage you to visit with one
about the tax consequences of
any of these methods of
Bootstrap Financing that you
might choose to employ.

Summary
Bootstrap Financing
Know and manage the risks at
the outset
Avoid legal and financial pitfalls
Tremendous Source of Capital
for Your Business

Raymond E. Williams
Williams Law Offices, LLC
(417) 256-4529

Equity & Mezzanine Finance

Jason Graf, CEO, CrowdIt

EQUITY & MEZZANINE FINANCING

Business Broker for Murphy Business & Financial

SCORE Mentor
CrowdIt.com
JP Advisors - Operations/Capital Acquisition
- BYOP Build Your Own Pizza
- Auto Concierge
- BEO Now
Idea Guy / Creative Thinker
SERTOMAN

Self-fund
Borrow
Friends and Family
Outside Investors
Accredited
Non-Accredited
Accredited Investors
10-12 Million Households in the US, out of 117
million
Test: $1M net worth (exclude home & related
debt); or$200K income last 2 years (or $300K with
spouse)

If you're a young entrepreneur who owns your own business

or wants to launch one, you have two basic ways to raise
money: with debt and with equity.
Debt financing means borrowing money.
Equity financing means selling a piece of the company.

Equity financing essentially refers to the sale of a

Shares
When a company sells shares to other investors, it
gives up a piece of itself as a way to raise money to
finance growth.

Small, privately held companies sell shares to

private investors, who then hold equity in the
company.
Companies that are more ambitious open their
shares up to the public. When a company goes
public and sells shares of stock, it's selling many
pieces of itself to whoever wants to buy.
In most cases this is the quickest way to amass
large amounts of cash to finance growth.

Venture Capital
Young companies often need money for growth or for
research and development, but they're not far enough along
to sell stock.

In such situations, they often look for help from venture

capitalists, or VCs. These are professional investors who
identify promising companies and sink money into them in
exchange for a share of ownership -- and, often, a voice in the
direction of the business.
Venture capitalists are in it for profit. They expect to cash in
their ownership stake when the company either goes public
by selling stock or gets acquired by another company.

Taking on a Partner
If you're looking to open a restaurant or a small
shop, you should understand going in that your
equity financing options will be very limited. You
might not get much interest from stockholders or
venture capitalists because the risk might be too
high and the return too low.
One option is to turn to the oldest form of equity
financing there is: taking on a partner.
You might tell a couple of friends that if they
each chip in $25,000, they will have equity in the
business.
In some instances, such as when everyone
invests the same amount of money, you will be
equal partners.
In other cases you might want to retain a
majority stake of the business and have partners
control less than 50% of the business.

Convertible Debt

Convertible debt blends the features of debt financing and equity financing. In bas

Those benchmarks might have to do with reaching revenue targets, raising money

Convertible debt offers investors a measure of security: They start out with a prom

THE PROS

THE CONS

No Interest Payments - You do not need

to pay your investors interest, although
you will owe them some portion of your
profits down the road.

Giving Up Ownership Equity

investors own a portion of your business,
and depending on your particular
agreement, they may be able to have a
say in your day-to-day operations,
including how you spend the money that
theyve invested.
For example, if you think you need a
BMW to meet with clients, and they
think you need a used Honda youll be
in the Honda.
Depending on who your investors are,
and how their vision for the business
aligns with yours this can be no
problem at all, or a major pain in the youknow-what.

No Liability If the business doesnt

succeed, the investors are the ones who
take the hit not you or your family.

No Monthly Payments - You probably

wont need to make monthly payments
until you make a profit which keeps
more cash in your pocket while you get
things up and running.

Mezzanine financing is basically debt capital that

gives the lender the rights to convert to an ownership or
equity interest in the company if the loan is not paid
back in time and in full. It is generally subordinated to
debt provided by senior lenders such as banks and
venture capital companies.
Typically Larger Companies
Tech
Healthcare

Tutorial

Mezzanine Financing

Advantages of mezzanine financing

Mezzanine capital gives your business the ability to execute a change of control, expand or acquire a competitor.
Interest-only payments allow your company to conserve cash.
While you may lose some independence, theres usually no loss of majority control of the company.
Flexible financing can be structured to best meet the needs of your business.
Mezzanine lenders can provide valuable strategic guidance and financial sophistication.

Disadvantages of mezzanine financing

You may be required to relinquish some equity upside so the lender can achieve its required rates of return. (On
the flip side, mezzanine lenders are there for the long term, so they have your companys best interests at heart.)
Mezzanine financing is more costly than other forms of debt, and may come with restrictive covenants.
The lender likely will require a board seat (typically, nonvoting).
Mezzanine financings are highly negotiated, and the process may be lengthy.
You may want to consider mezzanine financing if your company has a record of strong cash flow and needs more
funds than traditional senior debt can supply.

Start - Up
Business Plan Only
Large Investment Sought
7 Accredited Investors
Debt / Equity
30% first half
40% total

Existing Concept with Poor Management

Franchise Concept
Owner needed help
Secured Sweat Equity in exchange for Operations
20% Ownership
Secured Investor at 80% for funding
Up to $750,000 to launch stores / Franchise

Business was listed for sale

Decent Profits / Price
Awesome Potential for Scalability
Secured Investor for Purchase $
Debt / 30% Equity (reduced to 20% at payoff)
Earn-out financing

Start-up Company
Founder asked us to partner
Needed operations / organization help
Accounting
Staffing
Management
funding
Secured 20% Ownership
Helped secure funding

DISCUSSION

Angel Investing
John R. Perkins, Inspire Capital Corporation

Briefing for

West Plains Access to Capital

May 6, 2015

Key Definitions
Angel investing: Directly investing personal funds
in an early-stage business. Because the
investment occurs soon after a business is started
(and thus is risky), an angel must be financially
capable of losing the entire investment. As such,
most angel investors are relatively high-net-worth
individuals.

Angel organization: A formal or informal group of

active angel investors, typically characterized by
(a) control by members and (b) collaboration by
members in the investment process.
Source: Adapted from Kauffman Foundation angel-investing guidebook.

Sources of $ for Start-Ups &

Early-Stage Firms *
Pre-angels (friends, family, credit
cards) Typically $25,000 - $100,000.
Angels Typically $150,000 - $500,000
+ expertise & advice.

Grants & contracts (e.g., MTC, SBIR)

Wide-ranging amounts.
Venture capital firms Typically $1
million - $30 million.

* A bank might make a loan (e.g., SBA-guaranteed).

Early

Stage

Later

Angel Investors & Venture Capital

Firms Complementary
$24.8B +8.3%
70,730 deals
+5.5%
Avg. size = $351K
+2.6%

Mostly early &

expansion stages
$7.36M avg. size
+3.7%

3,995 deals +4%

Primarily start-up
stage

$29.4B +7%

2013 Angel Investment

2013 VC Investment

Source: UNH CVR

Source: PwC/NVCA

Intended Benefits for

Angels & Entrepreneurs
Obtain attractive ROI over long term (a triple
&/or a HR along with many Ks).
Prior to investment, give reactions & advice to
company founders & management.
Invest $$$ in start-ups.

Following an investment, provide guidance &

feedback to entrepreneurs & their companies.
This list shows the motivation for angel investors
as well as potential benefits to entrepreneurs.

Overview of CI
Created/formed by Columbia Chamber of
Commerce as part of its centennial
celebration $10K in start-up funds.

Founded in mid-2006, first deals in 2007.

65 members all accredited investors.

No $ put into a fund; no requirement re. $
invested per year.
Individuals make own investment
decisions.

Deal-Selection Criteria
Primary focus on technology- or
science-based start-ups.
Especially interested in mid-Mo.
deals; will consider deals from
elsewhere in Mo.

Prefer deals needing $150K - $500K.

Desire high-potential (scalable)
ventures.
Favor exit in 3 - 7 years.

Deal Process
Each step requires thumbs up for
process to continue:
1. Online application.
2. Prescreening by Missouri Innovation
Center (supports entrepreneurs,
operates incubator).

3. CI screening (committee of members).

4. Presentation & Q&A at members
meeting (20 + 15 minutes).

Deal Process (contd.)

5. Gauge interest (prefer >15 members).
6. CI due diligence underlying science
or technology, business plan, IP,
management, market opportunity.
7. Negotiate deal terms with company.
8. Form LLC for CI investors & collect $.
9. Close deal & arrange CI liaison.
10. Periodic updates to investors.

Deal Flow Funnel (Annually)

1. # of entrepreneurs that contact CI/MIC about
possible funding = >100.
2. Of 100, # that apply to CI = 30 (ratio depends on
application fee).
3. Of 30, # sent to Screening Committee = 20.
4. Of 20, # that get thumbs up from SC & present
at members meeting = 12.
5. Of 12, # that proceed to due diligence = 6.
6. Of 6, # in which CI invests = 2.

Plan/hope to increase deal flow increase # of

investments 5 deals closed since start of 2014.

Results to Date
Typical member investment = $5K-$20K.
$3.7M invested in 18 deals:
4 from MU & 14 from community.
12 group investments & 6 investments by several
individuals.

CI investments facilitated >$3M of grants,

equity, & debt for invested companies.
1 successful exit, 13 operating, & 3 RIP.
Have created >75 new jobs (>60 FTE).

CIs Investments to Date

Descriptions of CIs Investments *

Newsy multiperspective online video
news service.

Nasopure nasal washing device.

Equinosis equine lameness detection &
evaluation system.
Immunophotonics cancer therapy using a
drug/device intervention.
EternoGen collagen scaffold matrix for
regenerative medicine.
* Range = $15,000 to $500,000.

Elemental Enzymes
Our mission is to provide ultra-stable
enzymes and other custom biologics to a
variety of industries. Our products are
engineered for use in harsh conditions
such as outdoors and in industrial
processes.
CI investment in 2012 = $400,000 from 35
members.

Thank you!
Questions?

Commercial Loans
Eric Judd, West Plains Bank and Trust Company

Lunch Break
Catered by Coltons Steakhouse & Grill

City and State Tax Incentives

Robert D. Case, City of West Plains
Luke Holtschneider, Missouri Department of Economic Development

SBA Loan Programs

Eric Gholz, U.S. Small Business Administration (SBA)

SBA Programs and Resources

Eric Gholz, Economic Development Specialist
U.S. Small Business Administration
Springfield, MO Branch Office

KCDO & Springfield Branch Counties

www.sba.gov

www.sba.gov

SBA Loan Numbers in Southwest MO

Total of 317 SBA loans made this past fiscal year
(Oct 13 Sept 14) for a total of $98,008,800.
Top industries this last year:

Automotive parts and repair shops

Liquor stores
Chicken production
Hotels and motels
Dentists, lawyers, chiropractor, veterinary offices
Plumbing, heating, and A/C contractors

www.sba.gov

SBA 7(a) Loan Programs

Several loan programs through participating
lenders and guaranteed by SBA
Type of program depends on amount and lender

Loan funds come from bank, not direct from SBA

Borrowers work with lender and lender works
with SBA on paperwork
www.sba.gov

SBA 7(a) Loan Uses

Start a business
Purchase an existing business
Refinance debt
Purchase/construct building, leasehold
improvements, equipment and inventory
Working capital and lines of credit

www.sba.gov

Benefits to Borrower
Help banks make loans in some cases where they
may not normally be able to make the loan
Longer term = lower payment = improved cash
flow
Helps with shortfall in collateral
No balloon payments
Favorable interest rates as we set maximum rates
www.sba.gov

Fees to Borrower (7a)

Guaranty Fee to SBA*:
Loans over 1 year and based on guaranteed portion:

Loans $150,000 or less: 2% (waived during FY15)

Over $150,000 to $700,000: 3%
Over $700,000: 3.5%
Additional .25% for guaranteed portion over $1 million

Loans 1 year or less: .25% of guaranteed portion

Can be added to proceeds of loan*
www.sba.gov

Terms (7a)
Maximum to one borrower/business outstanding at
one time: $5,000,000
Generally, 75-85% guaranteed to bank; this is how
much SBA will pay out on a loss to the bank
Building purchase or construction: up to 25 years
Equipment, working capital, inventory: up to 10
years
If combined uses: between 10 and 25 years
Lines of credit: up to 7 years
www.sba.gov

10

Interest Rates
(Except SBA Express and 504 programs)

Variable Rate Maximum

Under 7 years: Prime + 2.25%; Currently 5.5%
7 years and over: Prime + 2.75%; Currently 6.0%

Fixed Rate Maximum

Under 7 years: Currently 7.60%
7 years and over: Currently 8.10%

Loans $25K or less: add 2% more to maximum

Loans over $25k to $50k: add only 1% more
www.sba.gov

11

504 Fixed Asset Loan Program

A 504 loan can be used for:
The purchase of land, including existing buildings
The purchase of improvements, including grading,
street improvements, utilities, parking lots and
landscaping
The construction of new facilities or modernizing,
renovating or converting existing facilities
The purchase of long-term machinery and equipment

www.sba.gov

12

504 Fixed Asset Loan Program

Borrower puts in 10% of cost
New business or special purpose property 15%
Both new business & special purpose property 20%

Bank finances 50%

Certified Development Company (CDC) finances 30-40%
depending on amount of equity injection
10 & 20 year terms
Great fixed interest rates on CDCs financing:
4.821% for 20 year term (October 2014)
4.695% for 10 year term (October 2014)
www.sba.gov

13

Microloans
The Microloan Program assists small businesses in
need non-traditional financing.
The SBA provides loans and grants to Intermediaries
who deliver technical assistance and training
A microloan is up to 6-years in length, fixed rate, of
$50,000 or less
It may not be a line of credit.
A microloan of more than $20,000 generally prohibited

About a micro lender intermediary

The Intermediary Makes all Credit Decisions
Must be organized as a not-for-profit, quasigovernmental economic development agency, or an
established Native American Tribal Government
Intermediaries are required to provide technical
assistance to their microloan borrowers
A microloan of more than $20,000 is generally
prohibited unless the borrower demonstrates that it is
unable to obtain credit elsewhere at comparable
interest rates

Basic SBA Eligibility Criteria

Must be for-profit
Business must be located in U.S.
Show ability to repay loan through cash flow
Not be on parole, probation or incarcerated
Must be considered small
Not more than $15 million in tangible net worth or more than
$5 million in net profit (avg last 2 years)

Eligibility Questionnaire from lender

Several types of businesses or scenarios may be ineligible
www.sba.gov

16

Items to Bring to Bank

Business plan
History/description of business
Management experience/resumes
Last 3 years of income statements and balance
sheets with interims to date
Last 3 years of filed business tax returns
Cash flow projections
www.sba.gov

17

Items to Bring to Bank

Aging of receivables; inventory listings
Quotes/purchase contracts for items to be purchased
with loan proceeds
Listing with terms of other business debts
Franchise agreements
Leases
Details of additional financing
Details of criminal history: type of offense, dates, etc
www.sba.gov

18

Questions?

Contact info:
Eric Gholz
830 E Primrose
Springfield, MO 65804
(417) 890-8501 Ext. 203
[email protected]
www.sba.gov

19

Snack Break
Be back in 10-minutes!

Certified Development Company

Mindy Murray, Rural Missouri Inc. (RMI)

Export Working Capital and Credit

Insurance
Mark E. Klein, Export-Import Bank of the United States

EX-IM Bank Exports Through Jobs

The official Export Credit Agency (ECA) of the
U.S. Government

Self-sustaining and Independent

Established in 1934
Headquarters in D.C.
Twelve Regional Offices
EX-IM Bank enables U.S. companies large and smallto turn export opportunities into real sales that help to
maintain and create U.S jobs and contribute to a
stronger national economy.
Export-Import Bank of the United States

Where are those Regional Offices ?

Export-Import Bank of the United States

No Cost to Taxpayers

$675 Million returned to U.S. Treasury in 2014

Default Rate of .175% as of the end of 2014
Export-Import Bank of the United States

Small Business IS Our Business

90% of transactions support small business
No transaction is too small

Export-Import Bank of the United States

No Deal is Too Small for EX-IM Bank

$400

$800

$12,600

Export-Import Bank of the United States

Global Consumers

(Were only 5%)

Working Capital Guarantee

Funds to pay for raw materials, labor, supplies, etc.

90% guarantee to lenders for export-related working capital

lender loans
Transaction specific or revolving loans
No minimum or maximum amount

https://www.youtube.com/watch?v=5Ct7Ea_zmSU

Export-Import Bank of the United States

Our Guarantee Increases Your Borrowing Power!

Export-Import Bank of the United States

Export Credit Insurance Exporter Benefits

Risk Mitigation

Allows exporters to safely extend credit terms to foreign

buyers
Competitiveness/Marketing
Extend terms to existing customers
Attract new customers and enter new markets
Financing Tool:
Ability to assign foreign receivables
Accelerate cash flow

https://www.youtube.com/watch?v=pXmhoFuz1-8
Export-Import Bank of the United States

Covered Risks
Commercial Risks
Insolvency
Bankruptcy
Protracted default

Political Risks
War, revolution, insurrection
Cancellation of import and export license
Currency transfer risk
Export-Import Bank of the United States

Short-Term Export Credit Insurance

Express Insurance Policy
New policy (introduced 3/30/2011) for small
businesses with up to 20 debtors

Streamlined application
EX-IM Bank will secure information on the first
couple of debtors and provide quote and debtor
approval within 5 business days for amounts up
to $300,000
Must Meet SBA Small Business Guidelines
Export-Import Bank of the United States

Short-Term Export Credit Insurance

Small Business Multi-Buyer Policy
For exporters with annual export credit sales of
less than $7.5 million, and which meet the SBA
definition of small business.
Special rates with no country risk factor
$500 deposit and NO deductible
Must Meet SBA Small Business Guidelines
Export-Import Bank of the United States

Pricing: Small Business Multi-buyer Policy

Term/
Type of Foreign Buyer

Class I:
Sovereign

Class II: Class III:

Bank
Private

Sight Letters of Credit

$0.03

$0.03

N/A

S/DD/P; CAD

$0.06

$0.08

$0.20

1-60 Days

$0.16

$0.20

$0.55

61-120 Days

$0.27

$0.33

$0.90

121-180

$0.35

$0.43

$1.15

181-270 days

$0.43

$0.54

$1.45

271-360 Days

$0.53

$0.65

$1.77

Pricing per $100 of insured shipments

Export-Import Bank of the United States

Short-Term Export Credit Insurance

Standard Multi-Buyer Policy
For exporters not defined as a small business, or
have annual export credit sales of more than
$7.5 million
Premiums based on term, country, and buyer type
Varied deposits and deductibles apply

Export-Import Bank of the United States

Short-Term Export Credit Insurance

Single-Buyer Policy
For exporters wishing to insure single or multiple
shipments to one buyers
Premiums based on term, country and buyer type
NO deductible, but minimum advanced premium
and deductibles apply

Export-Import Bank of the United States

Buyer Financing (Medium-Term)

Used to finance foreign buyers purchasing U.S. capital

equipment:
85% financed, 15% cash down payment
Repayment up to 5 years, exceptionally 7 years
Amounts of $10 million or less

Export-Import Bank of the United States

Just A Few Restrictions

U.S. Content Policy

Military Policy
Restricted Countries (CLS)

Export-Import Bank of the United States

U.S. Content Policies

Short-term:
Must exceed 50% U.S. content to support the entire
transaction
Products must be manufactured in and shipped from the
U.S. (for pre-export, companies must be located in the U.S.)
Services must be performed by U.S.- based personnel

Medium-term:
If contract has no more than 15% foreign
content, Bank supports 85% of the contract price

Otherwise, the Bank will limit support to the

U.S. content
Export-Import Bank of the United States

Military Policy
No Defense Articles or Services, or Military buyers
Three Exceptions:
Humanitarian purposes
Drug interdiction
Dual use items

Export-Import Bank of the United States

Restricted Countries
EX-IM Bank is open in all continents, with the
exception of some countries
Country restrictions for political or economic
conditions and default Issues

Refer to the Country

Limitation Schedule (CLS)
www.exim.gov, and under
Country/Fee info.

Export-Import Bank of the United States

Country Limitation Schedule (CLS)

Export-Import Bank of the United States

One Final Tool/Resource

Export-Import Bank of the United States

Success Story Auburn Leather; Auburn, KY

Export-Import Bank of the United States

Contact Information
Mark E. Klein
Regional Director
Central Region
[email protected]
Phone: 312.353.8073
Cell:
312.375.1883

Export-Import Bank of the United States

Accounts Receivable Financing and

Letters of Credit
Christine Glauber, Arvest Bank

International Banking

Presented by: Christine Glauber

(918)520-9316
[email protected]

International Department Mission

People Helping People Find Financial Solutions forDoing Business Across Borders
With the Top Service Level Available in the International Banking Market.

International Trade Services

Import and Export Letters of Credit

Import and Export Documentary Collections

Standby Letters of Credit

Domestic Standby Letters of Credit

International Standby Letters of Credit to support
Bid, Warranty and Performance Guarantees

International Treasury Management

Foreign Exchange Wires & Cash Management

Foreign Exchange Advisory Services & Risk Mitigation

4 Basic Methods of Payment and the

Relative Risk
Exporter

Importer
Open Account
Documentary Collections
(Time)
Documentary Collections
(Sight)
Letters of Credit

Confirmed Letter of Credit

Cash in Advance

Trade Services
Standby Letters of Credit
Domestic Standby Letters of Credit
Widely used in the U.S. but also worldwide

International Standby Letters of Credit

Used in the form of Bid or Performance Bonds (Bank
Guarantees)

Trade Services
Commercial Letters of Credit
Import Commercial Letters of Credit
Used as a mechanism of payment for imported goods

Export Commercial Letters of Credit

Used as a mechanism of payment for exported goods

Letter of Credit Process

Letter of Credit (Sight/Time)
Documents

Advising /
Confirming Bank

Application

Issuing/Opening Bank

Goods
Applicant / Buyer
Importer

Contract
Beneficiary/Seller
Exporter

Trade Services
Documentary Collections Inexpensive, non-loan
related product for high volume trade with
repetitive customers
Import Documentary Collections
D/A or D/P
(aka CAD or Cash Against Documents)

Export Documentary Collections

D/A or D/P

Cash Management & FX

International Cash Management
International Wires (USD and FX)
Foreign Bank Drafts
Foreign Check Clearing/International Cash Letters

Foreign Currency Advisory Services

FX Risk Awareness Hedging Strategy
FX Risk Mitigation
Forward & Window Contracts

Accounts Receivable Financing

Ex-Im Bank
$3.5MM Delegated Authority
Delegated Authority can expedite the lenders loan process
by having Ex-Im Banks committed guarantee without prior
approval
Ex-Im assumes 90% of the lenders credit risk
Other Ex-Im Programs
www.exim.gov

SBA Programs (i.e.Export Express)

Export Credit Insurance

Questions?

International Department
Phone: 1 (855) 682-2113 or (918) 631-1097
E-mail: [email protected]
SWIFT: ARVTUS44XXX
Christine Glauber ~ (918)520-9316 ~ [email protected]

One-on-One Appointments
Please check the schedule with Glenda and meet at your assigned table.