How to protect against non-payment by foreign customers

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Dear Professor Bruce:I'm a small business exporter trying to grow my business at a faster rate. Is the U.S. government able to help me get over the hurdle of foreign buyers who won't pay cash in advance? Is there some financing product that would help protect me against non-payment by foreign buyers, and at the same time enable me to access additional credit from my lender? Answer:The Export-Import Bank of the United States (Ex-Im Bank) is an independent federal government agency chartered by Congress that helps finance U.S. exports, and in the process helps create and sustain U.S. jobs. The Bank's products fill financing gaps, allowing U.S. exporters to break into new markets and increase their sales in existing ones. According to John Emens, Senior Vice President of Small Business at Ex-Im Bank, "one of the most useful financing products that Ex-Im Bank can provide to small business exporters is short-term export credit insurance, which protects against buyer nonpayment and enables small businesses to extend credit to their foreign buyers. Ex-Im Bank provided $2.1 billion of this type of insurance to approximately 1,800 U.S. small business exporters in fiscal year 2007."The insurance helps U.S. small businesses in three ways:1) It provides 95 percent coverage of each shipment, minimizing the political and commercial risks of buyer nonpayment so small companies can enter new markets. 2) It is a marketing tool that differentiates U.S. exporters from their foreign competitors by extending competitive credit terms to foreign buyers, typically 60-day payment terms.3) It gives U.S. companies access to additional financing from their commercial lenders to fill foreign orders by using U.S. government-insured export-related accounts receivable as additional collateral. Ex-Im Bank works with a variety of partners including:1) City-State Partners -- state and local private and government organizations that have been trained to help local businesses learn about and apply for a range of Ex-Im Bank financing products.2) Delegated Authority Lenders -- banks around the country that have been trained in Ex-Im Bank financing, and can approve Ex-Im Bank-guaranteed working capital loans, without prior approval from Ex-Im Bank, to help small businesses fill export orders. 3) Export credit insurance brokers that can help companies access Ex-Im Bank insurance products.In addition, the Commerce Department's U.S. Commercial Service has a network of export and industry specialists located in 104 cities across the United States and in over 80 countries worldwide to assist small and mid-sized U.S. exporters enter or expand into international markets. The centers provide one-stop shopping, with Ex-Im Bank and Small Business Administration offices often located there.Small businesses can't afford to ignore the importance of exporting, and the tools Ex-Im Bank offers to facilitate exports that otherwise would not go forward.For further information, please visit www.exim.gov.Bruce Freeman is president of ProLine Communications, a marketing and public relations firm in Livingston, NJ and co-author of Birthing the Elephant (Ten Speed Press). E-mail questions to Bruce(at)SmallBusinessProf.com.