Aug 20, 2024
Export-Import (EXIM) Bank of the United States is the federal agency that provides finance solutions to exporters as a way to support U.S. jobs. While EXIM is best known for offering export credit insurance, it is also a lender. EXIM’s Make More in America Initiative provides loans for the creation and expansion of U.S. manufacturing facilities that bolster the resiliency of U.S. supply chains as well as to certain types of supporting service providers. Kansas Department of Commerce is an EXIM Regional Export Promotion Program partner, and with our strong industrial base we want to make sure that Kansas manufacturers and related service providers know about this financing tool that can help companies access loans for up to $205,336 per job supported.
The Make More in America Initiative is a tool for building U.S. exporting capacity and supporting American jobs by U.S.-flagged companies or by international companies with production facilities in the U.S. It is open to manufacturers in any industry, though manufacturers and projects that meet certain criteria are federally mandated priorities, e.g., small business manufacturers and environmentally beneficial projects. Service providers that support export manufacturing also can qualify.
Of particular importance are congressionally designated transformational export area transactions. These areas include:
To qualify, the project must meet a minimum “export nexus” requirement. This is the percentage of production (measured in dollars or in units sold) intended for foreign markets. This can be through direct exports or indirect exports (i.e., by providing goods or services that go into exported goods or services by another company). The export nexus, however, does not need to be actualized at the beginning of the project. In other words, the loan recipient does not need to start exporting immediately. Rather, the export nexus can be achieved over the lifetime of the loan. This is important because it gives the company time to establish and smooth out its operations and develop its market entry. It would be helpful, though, for the company to have an international sales plan, letter of intent from a foreign buyer or prospective partner, contracts under negotiations or some similar indication of the intention and potential for export. To make the loans more easily accessible to prioritized manufacturers and projects (see above), the expected export output is 15% whereas for other projects and suppliers it is 25%.
Due diligence, of course, is part of the application approval process. EXIM must have “reasonable reassurance of repayment” as determined by company history, debt service capacity, and tangible net worth. Within reasonable reassurance of repayment, the amount of financing available is based on the number of U. S. jobs supported by the project from the start of construction through the end of the loan. For each “job year”, each year that a job is supported by the project, up to $205,336 is available in financing. Depending on the project, loans are available in terms from three to twenty-two years.
Through the Make More in America Initiative, EXIM is not competing with commercial lenders. The loans are structured as gap financing, i.e., they are intended to fill the gap between traditional commercial financing and the company’s needs. This means that the borrower must work with a commercial lender in addition to working with EXIM. Financing for manufacturing facilities can be difficult to secure. What the EXIM loans do is increase the amount of financing available to qualifying companies over what might be available to them through commercial lenders.
Kansas has a number of strengths in manufacturing, including in sectors prioritized by the Make More in America Initiative. Companies that are interested in learning more about this initiative, other financing options, and incentives available through Kansas Department of Commerce should look at our website or contact us at [email protected]. Kansas companies are also invited to participate in our Preliminary Supply Chain Needs Assessment Survey. Kansas manufacturers may also be interested in applying to use the Made In Kansas trustmark to champion the quality of their products nationally and globally. To learn about the Made in Kansas Program, contact [email protected]. Our team at Commerce is here to support and grow Kansas companies, Kansas jobs, and the Kansas economy!
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Laurie Pieper, Ph.D., CGBP
Assistant Director, Global Resources
International Division, Kansas Department of Commerce
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