Legal Definitions - Ex-Im Bank

The Ex-Im Bank, formally known as the Export-Import Bank of the United States, is an independent agency of the U.S. federal government. Its primary mission is to support American jobs by facilitating the export of U.S. goods and services. It does this by providing financing and insurance to foreign buyers of U.S. products, or to U.S. companies themselves, when private sector lenders are unable or unwilling to provide the necessary support. Essentially, Ex-Im Bank helps U.S. businesses compete globally by mitigating financial risks associated with international trade and ensuring they have access to competitive financing.

Here are a few examples illustrating the role of the Ex-Im Bank:

• Supporting a Small Manufacturer's Overseas Sale: Imagine a small American company that manufactures specialized medical devices. A hospital system in a developing country wants to purchase these devices but faces challenges securing affordable financing from its local banks for an international transaction. The Ex-Im Bank can step in by providing a loan guarantee to a commercial bank, making it less risky for that bank to lend money to the foreign hospital. This guarantee enables the hospital to purchase the U.S.-made medical devices, allowing the American manufacturer to complete a significant export sale and sustain its workforce.

• Leveling the Playing Field for a Major Aerospace Company: A large U.S. aerospace manufacturer is bidding against European and Asian competitors to sell commercial aircraft to a major international airline. The foreign competitors are offering highly attractive financing packages, often backed by their own government export credit agencies. To ensure the U.S. company can compete fairly, the Ex-Im Bank can offer a direct loan or a loan guarantee to the international airline, matching or exceeding the financing terms offered by foreign governments. This support helps the U.S. manufacturer secure the contract, protecting American jobs and technological leadership.

• Assisting a U.S. Engineering Firm with an International Project: A U.S.-based engineering and construction firm wins a contract to design and oversee the construction of a new port facility in a foreign country. The firm needs to manage significant upfront costs and potential delays in payment from the foreign government client. The Ex-Im Bank can provide export credit insurance to the U.S. firm, protecting it against the risk of non-payment or political instability in the client country. Alternatively, it could offer a working capital guarantee to a U.S. bank, enabling the bank to provide a loan that covers the firm's operational expenses for the international project. This allows the U.S. firm to confidently undertake the project, exporting American expertise and services.