Export Government Program

California Bank & Trust is an active participant in government-sponsored credit support programs which exist to create more jobs in the U.S. Government export programs generally fall into two categories as described below:

1. Guaranteed working capital loans to Exporters. Such programs assist exporters who are otherwise unable to obtain the amount of needed financing from a bank without outside credit support. These programs have many facets in common, some of which are:

• Proceeds of the facility must exclusively be used to finance the export cycle.
• Goods or services produced by Exporter must be > 51% made in the U.S.
• Goods must be purchased by buyers in acceptable countries.
• Disbursement of proceeds is made against eligible purchase orders or receivables on a formula basis.
• Each program requires that owner(s) provide a personal guarantee.

2. Guaranteed or insured medium term loans to foreign buyers. Proceeds from the banks loan to the buyer pays the exporter at shipment. The buyer can take up to five years to repay the bank in semiannual installments. If the buyer fails to repay, ExIms insurance or guarantee covers the bank for up to 100% of principal and interest.

The U.S. Exporter benefits because it receives prompt payment for goods at shipment, which improves cash flow. This Program lets and Exporter enhance the terms of sale offered to foreign customers, for whom quantities of dollar exchange may be difficult to obtain at one time or whose cash flow is limited. An Exporter can offer up to five years repayment and at currently attractive USD interest rates. Some important considerations for medium-term insurance or guarantee programs:

• Buyer (or guarantor) must meet ExIm credit requirements. Both ExIm and CB&T must approve the buyer prior to issuing a policy or guarantee. Country of buyer must be acceptable to ExIm.
• Goods financed are usually capital equipment.
• Buyer must provide at least 15% down payment to the exporter prior to shipment (or alternatively seller can finance this portion). The financed amount is always equal to or less than 85% of the contract amount. Financed amount
  must be < $10MM (CB&Ts minimum is $250,000).
• Tenor is between 2-5 years, depending on amount.
• Buyer and exporter must be unrelated (i.e. cannot be a parent/sub/affiliate relationship).
• If U.S. content is < 85% of export's value, ExIms insurance will not cover 100% of financed amount. The exporter
  may obtain the insurance and assign the policy to the financing bank.

Other requirements vary depending upon the sponsor of the program. Complete details may be found on the websites of the following agencies that sponsor export finance programs:

• Export-Import Bank of the U.S. (ExIm): Working Capital Guarantee Program. CB&T has Delegated Authority under this program.
• Small Business Administration (SBA ): Export Working Capital Program

If any of the above programs piques your interest, please call your International Trade Finance Officer in your region, or CB&Ts Government Export Program Coordinator at (213) 593-2122 for further information.