For entrepreneurs and small businesses operating in today’s economy, access to capital is imperative, and doing business domestically has become limited – especially for minority business enterprises (MBEs).
Therefore, it is time for MBEs to start looking beyond American soil and tapping into markets overseas where consumers are constantly looking for U.S.-made goods and services. Not to mention that advances in technology and communications have built more trust between buyers and sellers — making it easier than ever to sell to the 95 percent of purchasers not living in this country.
Creditworthy MBEs interested in doing business internationally or expanding their current global footprint can benefit from a wide array of federal export assistance programs, including theExport-Import Bank of the United States(EXIM).
EXIM is the nation’s official export credit agency and was formed more than 85 years ago to help createAmerican jobs by facilitating exports. Itequips American exporters with the financing and protection needed to enter new markets and diversify their customer portfolios. EXIM accomplishes this by working with lenders and brokers to ensure U.S. companies get the financial assistance they need to sell abroad and be competitive in international markets.
More than 100countries around the world have comparable agencies to boost their economies’ exports.
In the late 1990s, EXIM established a Minority and Women-Owned Small Business unit, more commonly known asMWOB ,to expand outreach to businesses in traditionally underserved groups.
“MWOB is important because a large number of minority and women-owned businesses are service-based enterprises and not aware that what they’re doing can be considered an export. If a service is being performed in America and involves U.S. personnel at the request of a foreign buyer, it may qualify for export financing.” explained MWOB DirectorTamara Maxwell.“One of the biggest barriers, aside from limited access to capital, preventing these entrepreneurs from engaging in foreign business is a lack of awareness about the tools and support available to help them.”
MWOB works exclusively with minority and women-owned businesses to help grow their exports by providing hands-on guidance on how to qualify for and access EXIM financing.
EXIM offers working capital needed to fulfill an export sales order, pay operating and overhead costs, and increase cash flow. It does this by issuing a loan guarantee to a commercial lender to incentivize the lender to loan capital to a small business.
Besides financing assistance, EXIM also provides insurance policies that protect U.S. exporters against the risk of nonpayment and enable them to offer creditterms to international customers.
The objective is to alleviate concerns of risk and help U.S. companies win deals against foreign competitors.
“Having an opportunity to finance a purchase can make all the difference in securing an international contract,” Maxwell said.
EXIM has done business with thousands of MBEs over the last two decades, including withDevMar Products, owned bySharon Reynoldsin Nashville, Tennessee. The company exports innovative cleaning solutions and safety merchandise to healthcare, hospitality, and food-service industries all over the world with the assistance of an EXIM Bank insurance policy.
Reynolds came to EXIM in 2016 because she wanted the added financial security and guaranteed payment for her products as her business expanded globally.
“EXIM allows small businesses the opportunity to engage in a level playing field among its competitors,” said Reynolds.
Since obtaining the policy, DevMar has had the confidence and peace-of-mind to sell to new customers in Mexico, Canada, and many other countries.
In fiscal years 2016 and 2017 combined, more than 45 percent of all small business transactions approved by EXIM were for women and minority-owned businesses.
EXIM’s MBEs come from a variety of cultural backgrounds and provide an equally diverse range of products and services to their global consumers,including software management, freight forwarding services, hair care products, food, beverages, and even supplying parts, pieces and equipment to larger companies that are exporting. There’s really no limit to the type of business EXIM will support as long as U.S. content requirements are met.
MWOBs can learn how EXIM financing can empower them to increase foreign sales by visitingbit.ly/exim-mwobor the homepage atwww.exim.gov.