Charles J. Hall is the acting chairman and president of the Export-Import Bank of the United States (EX-IM), the official American government’s export credit agency. Serving as executive vice president since 2013, he was appointed to the top position by former President Barack Obama in January of this year.
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Previously, Hall was CEO of the Envirotrade Group, with offices in the United Kingdom and South Africa.
He began his career as a U.S. Navy officer, later serving as a U.S. Foreign Service Officer, with postings in Kenya, Brazil and Washington. He holds a BS in Economics from the Wharton School at the University of Pennsylvania and a MBA from Columbia University in New York.
Under Hall’s direction, Export-Import Bank staff members prepared answers to a series of questions that are often asked by business owners interested in accessing the program. The responses have been edited for clarity and context by Aftermarket Business World:
Q: Is Export Credit Insurance cost-prohibitive for small businesses?
A: Depending on an exporter’s needs and risk exposure, costs may vary from 55 cents to $1.77 per every $100 of invoice value. Our most popular product, Express Insurance, for example, allows the exporter to pay 65 cents per every $100 of invoice value for credit terms up to 60 days. For a shipment of $10,000 to a foreign buyer, the premium due is just $65 ($10,000 x .0065). The best way to find out the exact costs for your business is to contact an EX-IM export finance expert directly.
Q: How long does it take to get approved for insurance? How difficult is the application?
A: The application is online, simple and user-friendly. However, most exporters work with a trade finance broker and the broker’s fee is no additional cost, as it is included in the premium paid. Brokers guide exporters through the application process and provide ongoing service, such as assistance in filing claims. The turnaround time for Express Insurance is typically under 10 business days. To find out more about the application process, schedule a consultation with a highly experienced export financial specialist, who can be reached at one of our regional offices or by visiting www.Ex-Im.gov.
Q: What deal size would make it worthwhile? Is my business too small?
A: No deal is too small. EX-IM insures deals that range from a few hundred dollars to billions of dollars. For most policies, exporters pay premiums only on products that they ship, assuring that there are no lost premium dollars. For buyers of Multi-Buyer Insurance, there is also no minimum annual premium required. There are special policies for small businesses that offer up to 95 percent coverage against nonpayment by foreign buyers on short-term credit sales, with no deductible.
Q: What’s the difference between Single-buyer vs. Multi-buyer Insurance?
A: There are policy options that cover a single foreign buyer, a defined set of many buyers, or the exporter’s entire foreign buyer portfolio. Policies cover both commercial and political risks. For Single-Buyer Insurance, coverage rates range from 90 percent to100 percent of the invoice value at an affordable premium.
For Multi-Buyer Insurance, no advance premium is required from small businesses (fewer than 500 employees), and no minimum annual premium is required. Standard coverage is 95 percent of the invoiced amount, and sovereign buyers are covered at 100 percent. To find out which type of insurance best suits your business needs, contact an EX-IM export finance specialist.
Q: Can you explain in simple terms why my business needs this insurance?
A: Export credit insurance equips exporters to manage risk and offer more attractive credit terms to foreign buyers. At the same time, having export credit insurance unlocks more attractive financing options. Banks will often allow exporters to borrow against insured receivables that would otherwise be excluded from the borrowing base. Some exporters use EX-IM’s export credit insurance to conduct due diligence on their foreign buyers. Before EX-IM approves an export credit insurance application, the Bank assesses the credit worthiness of an exporter’s foreign buyers. Thus, if an exporter’s application is approved by EX-IM, the burden of credit management decisions is effectively transferred to EX-IM and the exporter can focus on his core business operations.
Q: What are the main eligibility requirements to qualify for EX-IM Support?
A: Small businesses meet basic eligibility requirements if they: (1) have been in business for at least a year; (2) have at least one person working in the firm full-time; (3) have a positive net worth; and (4) export products and/or services that have more than 50 percent U.S. content based on all direct and indirect costs (e.g. labor, materials and administrative costs). To learn more about the full list of EX-IM eligibility and regulations, download our Export Credit Insurance eBook.
Q: How can additional details be obtained at the local level?
A: There are 13 regional offices available to assist you: