          
                     FINANCING EXPORT TRANSATCTION
          
          
          Exporters naturally want to get paid as quickly as 
          possible, and importers usually prefer delaying payment at 
          least until they have received and resold the goods. 
          Because of the intense competition for export markets, 
          being able to offer good payment terms is often necessary 
          to make a sale. Exporters should be aware of the many 
          financing options open to them so that they may choose the 
          one that is most favorable for both the buyer and the 
          seller.
          
          An exporter may need (1) preshipment financing to produce 
          or purchase the product or to provide a service or (2) 
          postshipment financing of the resulting account or accounts 
          receivable, or both. The following factors are important to 
          consider in making decisions about financing:
          
          *    The need for financing to make the sale. In some 
               cases, favorable payment terms make a product more 
               competitive. If the competition offers better terms 
               and has a similar product, a sale can be lost.  In 
               other cases, the exporter may need financing to 
               produce the goods that have been ordered or to finance 
               other aspects of a sale, such as promotion and selling 
               expenses, engineering modifications, and shipping 
               costs. Various financing sources are available to 
               exporters, depending on the specifics of the 
               transaction and the exporter's overall financing 
               needs.
          
          *    The cost of different methods of financing. Interest 
               rates and fees vary. The total costs and their effect 
               on price and profit should be well understood before a 
               pro forma invoice is submitted to the buyer.
          
          *    The length of time financing is required. Costs 
               increase with the length of terms. Different methods 
               of financing are available for short, medium, and long 
               terms. However, exporters also need to be fully aware 
               of financing limitations so that they can obtain the 
               financing required to complete the transaction.
          
          *    The risks associated with financing the transaction. 
               The greater the risks associated with the transaction 
               -- whether they actually exist or are only perceived 
               by the lender -- the greater the costs to the exporter 
               as well as the more difficult financing will be to 
               obtain. Financing will also be more costly.
          
          The creditworthiness of the buyer directly affects the 
          probability of payment to the exporter, but it is not the 
          only factor of concern to a potential lender. The political 
          and economic stability of the buyer's country also can be 
          of concern. To provide financing for either accounts 
          receivable or the production or purchase of the product for 
          sale, the lender may require the most secure methods of 
          payment, a letter of credit (possibly confirmed), or export 
          credit insurance.
          
          If a lender is uncertain about the exporter's ability to 
          perform, or if additional credit capacity is needed, a 
          government guarantee program may enable the lender to 
          provide additional financing.
          
          *    The availability of the exporter's own financial 
               resources. The company may be able to extend credit 
               without seeking outside financing, or the company may 
               have sufficient financial strength to establish a 
               commercial line of credit. If neither of these 
               alternatives is possible or desirable, other options 
               may exist, but the exporter should fully explore the 
               available options before issuing the pro forma 
               invoice.
          
          For assistance in determining which financing options may 
          be available, the following sources may be consulted:
          
          *    The exporter's international or domestic banker.
          *    The exporter's state export promotion or export 
               finance office.
          *    The Department of Commerce district office.
          _    The SBA.
          _    The Eximbank, Washington, D.C.
          
          EXTENDING CREDIT TO FOREIGN BUYERS
          
          Exporters need to weigh carefully the credit or financing 
          they extend to foreign customers. Exporters should follow 
          the same careful credit principles they follow for domestic 
          customers. An important reason for controlling the credit 
          period is the cost incurred, either through use of working 
          capital or through interest and fees paid. If the buyer is 
          not responsible for paying these costs, then the exporter 
          should factor them into the selling price.
          
          A useful guide for determining the appropriate credit 
          period is the normal commercial terms in the exporter's 
          industry for internationally traded products. Buyers 
          generally expect to receive the benefits of such terms. 
          With few exceptions, normal commercial terms range from 30 
          to 180 days for off-the-shelf items like consumer goods, 
          chemicals, and other industrial raw materials, agricultural 
          commodities, and spare parts and components. Custom-made or 
          higher-value capital equipment, on the other hand, may 
          warrant longer repayment periods. An allowance may have to 
          be made for longer shipment times than are found in 
          domestic trade, because foreign buyers are often unwilling 
          to have the credit period start before receiving the goods.
          
          Foreign buyers often press exporters for longer payment 
          periods, and it is true that liberal financing is a means 
          of enhancing export competitiveness. The exporter should 
          recognize, however, that longer credit periods increase any 
          risk of default for which the exporter may be liable.
          
          Thus, the exporter must exercise judgment in balancing 
          competitiveness against considerations of cost and safety. 
          Also, credit terms once extended to a buyer tend to set the 
          precedent for future sales, so the exporter should 
          carefully consider any credit terms extended to first-time 
          buyers.
          
          Customers are frequently charged interest on credit periods 
          of a year or longer but infrequently on short-term credit 
          (up to 180 days). Most exporters absorb interest charges 
          for short-term credit unless the customer pays after the 
          due date.
          
          Obtaining cash immediately is usually a high priority with 
          exporters.  One way they do so is by converting their 
          export receivables to cash at a discount with a bank.  
          Another way is to expand working capital resources. A third 
          approach, suitable when the purchase involves capital goods 
          and the repayment period extends a year or longer, is to 
          arrange for project financing. In this case, a lender makes 
          a loan directly to the buyer for the project and the 
          exporter is paid immediately from the loan proceeds while 
          the bank waits for payment and earns interest. A fourth 
          method, when financing is difficult to obtain for a buyer 
          or market, is to engage in countertrade to afford the 
          customer an opportunity to generate earnings with which to 
          pay for the purchase.
          
          The options that have been mentioned normally involve the 
          payment of interest, fees, or other costs. Some options are 
          more feasible when the amounts are in larger denominations.  
          Exporters should also determine whether they incur 
          financial liability should the buyer default.
          
          COMMERCIAL BANKS
          
          The same type of commercial loans that finance domestic 
          activities -- including loans for working capital and 
          revolving lines of credit -- are often sought to finance 
          export sales until payment is received. However, banks do 
          not usually extend credit solely on the basis of an order.
          
          A logical first step in obtaining financing is for an 
          exporter to approach its local commercial bank. If the 
          exporter already has a loan for domestic needs, then the 
          lender already has experience with the exporter's ability 
          to perform. Many exporters have very similar, if not 
          identical, preshipment needs for both their international 
          and their domestic transactions. Many lenders, therefore, 
          would be willing to provide financing for export 
          transactions if there were a reasonable certainty of 
          repayment. By using letters of credit or export credit 
          insurance, an exporter can reduce the lender's risk.
          
          When a lender wishes greater assurance than is afforded by 
          the transaction, a government guarantee program (see the 
          "Government Assistance Programs" section of this chapter) 
          may enable a lender to extend credit to the exporter.
          
          For a company that is new to exporting or is a small or 
          medium-sized business, it is important to select a bank 
          that is sincerely interested in serving businesses of 
          similar type or size. If the exporter's bank lacks an 
          international department, it will refer the exporter to a 
          correspondent bank that has one. The exporter may want to 
          visit the international department -- of the exporter's own 
          bank or a correspondent bank -- to discuss its export 
          plans, available banking facilities, and applicable fees.
          
          When selecting a bank, the exporter should ask the 
          following questions:
          
          *    What are the charges for confirming a letter of 
               credit, processing drafts, and collecting payment?
          
          *    Does the bank have foreign branches or correspondent 
               banks? Where are they located?
          
          *    Can the bank provide buyer credit reports? At what 
               cost?
          
          *    Does it have experience with U.S. and state government 
               financing programs that support small business export 
               transactions? If not, is it willing to consider 
               participating in these programs?
          
          *    What other services, such as trade leads, can it 
               provide?
          
          Banker's acceptances and discounting
          
          A time draft under an irrevocable letter of credit 
          confirmed by a prime U.S. bank presents relatively little 
          risk of default. Also, some banks or other lenders may be 
          willing to buy time drafts that a creditworthy foreign 
          buyer has accepted or agreed to pay at a specified future 
          date.  In some cases, banks agree to accept the obligations 
          of paying a draft, usually of a customer, for a fee; this 
          is called a banker's acceptance.
          
          However, to convert these instruments to cash immediately, 
          an exporter must obtain a loan using the draft as 
          collateral or sell the draft to an investor or a bank for a 
          fee. When the draft is sold to an investor or bank, it is 
          sold at a discount. The exporter receives an amount less 
          than the face value of the draft so that when the draft is 
          paid at its face value at the specified future date, the 
          investor or bank receives more than it paid to the 
          exporter. The difference between the amount paid to the 
          exporter and the face amount paid at maturity is called a 
          discount and represents the fees or interest (or both) the 
          investor or bank receives for holding the draft until 
          maturity. Some drafts are discounted by the investor or 
          bank without recourse to the exporter in case the party 
          that is obligated to pay the draft defaults; others may be 
          discounted with recourse to the exporter, in which case the 
          exporter must reimburse the investor or bank if the party 
          obligated to pay the draft defaults. The exporter should be 
          certain of the terms and conditions of any financing 
          arrangement of this nature.
          
          Project finance
          
          Some export sales, especially sales of capital equipment, 
          may sometimes require financing terms tailored to the 
          buyer's cash flow and may involve payments over several 
          years. Often the buyer obtains a loan from its own bank or 
          arranges for other financing to enable it to pay cash to 
          the exporter. If other project financing is required, 
          either the exporter or the foreign buyer can initiate the 
          proposal.
          
          U.S. exporters frequently benefit from project finance in 
          which federal agencies such as the Eximbank and OPIC 
          participate. Although these programs are designed to 
          support the purchase of U.S. goods and services, many U.S. 
          companies export without being parties to the project 
          finance or even being aware of its existence.
          
          OTHER PRIVATE SOURSES
          
          Factoring, forfaiting, and confirming
          
          Factoring is the discounting of a foreign account 
          receivable that does not involve a draft. The exporter 
          transfers title to its foreign accounts receivable to a 
          factoring house (an organization that specializes in the 
          financing of accounts receivable) for cash at a discount 
          from the face value. Although factoring is often done 
          without recourse to the exporter, the specific arrangements 
          should be verified by the exporter. Factoring of foreign 
          accounts receivable is less common than factoring of 
          domestic receivables.
          
          Forfaiting is the selling, at a discount, of longer term 
          accounts receivable or promissory notes of the foreign 
          buyer. These instruments may also carry the guarantee of 
          the foreign government. Both U.S. and European forfaiting 
          houses, which purchase the instruments at a discount from 
          the exporter, are active in the U.S. market. Because 
          forfaiting may be done either with or without recourse to 
          the exporter, the specific arrangements should be verified 
          by the exporter.
          
          Confirming is a financial service in which an independent 
          company confirms an export order in the seller's country 
          and makes payment for the goods in the currency of that 
          country. Among the items eligible for confirmation (and 
          thereby eligible for credit terms) are the goods 
          themselves; inland, air, and ocean transportation costs; 
          forwarding fees; custom brokerage fees; and duties. For the 
          exporter, confirming means that the entire export 
          transaction from plant to end user can be fully coordinated 
          and paid for over time. Although confirming is common in 
          Europe, it is still in its infancy in the United States.
          
          Export intermediaries
          
          In addition to acting as export representatives, many 
          export intermediaries, such as ETCs and EMCs, can help 
          finance export sales.  Some of these companies may provide 
          short-term financing or may simply purchase the goods to be 
          exported directly from the manufacturer, thus eliminating 
          any risks associated with the export transaction as well as 
          the need for financing. Some of the larger companies may 
          make countertrade arrangements that substitute for 
          financing in some cases.
          
          Buyers and suppliers as sources of financing
          
          Foreign buyers may make down payments that reduce the need 
          for financing from other sources. In addition, buyers may 
          make progress payments as the goods are completed, which 
          also reduce other financing requirements.  Letters of 
          credit that allow for progress payments upon inspection by 
          the buyer's agent or receipt of a statement of the exporter 
          that a certain percentage of the product has been completed 
          are not uncommon.
          
          In addition, suppliers may be willing to offer terms to the 
          exporter if they are comfortable that they will receive 
          payment. Suppliers may be willing to accept assignment of a 
          part of the proceeds of a letter of credit or a partial 
          transfer of a transferable letter of credit.  However, some 
          banks allow only a single transfer or assignment of a 
          letter of credit. Therefore, the exporter should 
          investigate the policy of the bank that will be advising or 
          confirming the letter of credit.
          
          GOVERNMENT ASSISTANCE PROGRAMS
          
          Several federal government agencies, as well as a number of 
          state and local ones, offer programs to assist exporters 
          with their financing needs. Some are guarantee programs 
          that require the participation of an approved lender; 
          others provide loans or grants to the exporter or a foreign 
          government.
          
          Government programs generally aim to improve exporters' 
          access to credit rather than to subsidize the cost at 
          below-market levels. With few exceptions, banks are allowed 
          to charge market interest rates and fees; part of those 
          fees is paid to the government agencies to cover the 
          agencies' administrative costs and default risks.
          
          Government guarantee and insurance programs are used by 
          commercial banks to reduce the risk associated with loans 
          to exporters. Lenders concerned with an exporter's ability 
          to perform under the terms of sale, and with an exporter's 
          ability to be paid, often use government programs to reduce 
          the risks that would otherwise prevent them from providing 
          financing.
          
          In overview, the Eximbank is the federal government's 
          general trade finance agency, offering numerous programs to 
          address a broad range of needs. Credit insurance provided 
          through its affiliate, the FCIA, protects against default 
          on exports sold under open account terms and drafts and 
          letters of credit that are not the obligation of a U.S.  
          entity. (Excluded are drafts that have been accepted by a 
          U.S. bank or corporation and letters of credit confirmed by 
          a U.S. bank.) Other guarantee and loan programs extend 
          project finance and medium-term credit for durable goods.
          
          Other agencies fill various market niches. USDA offers a 
          variety of programs to foster agricultural exports. The TDP 
          (see chapter 7) provides grant financing for project 
          planning activities conducted by U.S. firms and thereby 
          seeks to give a U.S. "imprint" on project feasibility 
          studies and design. SBA offers programs to address the 
          needs of smaller exporters. OPIC provides specialized 
          assistance to U.S. firms through its performance bond and 
          contractor insurance programs. AID provides grants to 
          developing nations that can be used to purchase U.S.  goods 
          and services.
          
          Although the Department of Commerce does not offer any 
          financing programs of its own, export counseling is 
          available through its district offices. In addition, 
          current articles on export finance programs are 
          periodically published in Business America.
          
          The following descriptions provide a basic overview.
          
          EXPORT-IMPORT BANK OF THE UNITED STATES
          
          Eximbank is an independent U.S. government agency with the 
          primary purpose of facilitating the export of U.S. goods 
          and services. Eximbank meets this objective by providing 
          loans, guarantees, and insurance coverage to U.S. exporters 
          and foreign buyers, normally on market-related credit 
          terms.
          
          Eximbank's insurance and guarantee programs (see table 
          14-1) are structured to encourage private financial 
          institutions to fund U.S.  exports by reducing the 
          commercial risks (such as buyer insolvency and failure to 
          pay) and political risks (such as war and currency 
          inconvertibility) exporters face. The financing made 
          available under Eximbank's guarantees and insurance is 
          generally on market terms, and most of the commercial and 
          political risks are borne by Eximbank.
          
          Eximbank's loan program, on the other hand, is structured 
          to neutralize interest rate subsidies offered by foreign 
          governments. By responding with its own subsidized loan 
          assistance, Eximbank enables U.S. financing to be 
          competitive on specific sales with that offered by foreign 
          exporters.
          
          Preexport Financing
          
          The Working Capital Guarantee program enables lenders to 
          provide financing an exporter may need to purchase or 
          produce a product for export as well as finance short-term 
          accounts receivable. If the exporter defaults on a loan 
          guaranteed under this program, Eximbank reimburses the 
          lender for the guaranteed portion _ generally, 90 percent 
          of the loan _ thereby reducing the lender's overall risk. 
          The Working Capital Guarantee program can be used either to 
          support ongoing export sales or to meet a temporary cash 
          flow demand arising from a single export transaction.
          
          The loan principal can be up to 90 percent of the value of 
          the collateral put up by the exporter, a relatively 
          generous percentage.  Eligible collateral includes foreign 
          receivables, exportable inventory purchased with the 
          proceeds of the loan, and goods in production. The term of 
          the guaranteed line of credit is generally one year, but a 
          longer period may be acceptable.
          
          Postexport Financing
          
          Eximbank offers commercial and political risk insurance 
          through its affiliate, the FCIA. The insurance protects 
          mostly short-term credit extended for the sale of consumer 
          goods, raw materials, commodities, spare parts, and other 
          items normally sold on terms of up to 180 days.  Coverage 
          is also available for some bulk commodities sold on 360-day 
          terms and capital and quasi-capital goods sold on terms of 
          up to five years.
          
          FCIA's insurance policies for exporters include the 
          New-to-Export Policy, Single-Buyer Policy, and Multi-Buyer 
          Policy. In addition, the Umbrella Policy enables an 
          administrator to handle most administrative duties for the 
          exporter. With prior written approval, exporters can assign 
          the rights to any proceeds to a lender as collateral for 
          financing.
          
          FCIA's policies cover up to 100 percent of loans due to 
          specified political risks, such as war and expropriation, 
          and up to 95 percent due to loans from other commercial 
          risks, such as buyer default and insolvency. Exporters 
          generally must meet U.S. content requirements and, under 
          some policies, must insure all eligible foreign sales.
          
          FCIA premiums reflect various risk factors, including 
          length of credit period, payment method, and the country of 
          the buyer. In keeping with insurance principles, FCIA seeks 
          a reasonable spread of risk among the different export 
          markets and avoids unduly concentrated credit exposure.
          
          Several private companies also offer export credit 
          insurance covering political and commercial risks. Private 
          insurance is available for established exporters with a 
          proven track record, often at competitive premium rates, 
          although underwriting capacity in particular markets may be 
          limited. Coverage for contract repudiation and wrongful 
          calling of a bid or performance bond may also be available 
          in the private market.  Contact an insurance broker for 
          more information.
          
          To encourage exporters and lenders to make export loans to 
          creditworthy foreign buyers of U.S.-produced goods and 
          services, Eximbank offers its guarantee program. Eximbank 
          guarantees the repayment of medium-term (up to seven years 
          and less than $10 million) loans to foreign buyers of U.S. 
          goods and services. Lenders charge market rate interest on 
          the loan. A minimum 15 percent cash payment is required 
          from the buyer; the remaining 85 percent is financed. 
          Eximbank's guarantee covers 100 percent of the political 
          risk and 85 percent of the commercial risk of the principal 
          on medium-term loans. Coverage for the loan's interest is 
          also provided. Eximbank guarantees loans made in U.S. 
          dollars or any other freely convertible currency.
          
          Eximbank offers fixed-rate financing for long-term sales 
          (repayment periods up to 10 years) for projects such as 
          telecommunications, power plants, and transportation. The 
          interest rates, which are set under international agreement 
          and regularly adjusted in step with market conditions, 
          reflect the per capita income of the importing country and 
          the repayment period of the loan. Eximbank loans to 
          developed countries are charged market interest rates; 
          loans to less developed countries may be slightly less. In 
          practice, Eximbank seldom lends to buyers in developed 
          countries. To qualify for an Eximbank loan, an exporter 
          must show evidence of foreign government-supported 
          competition. This qualification may be waived for small 
          businesses requesting loans of $2.5 million or less. Like 
          the guarantee program, Eximbank's loans require a 15 
          percent cash payment in advance.
          
          For more information on Eximbank's programs contact the 
          Marketing and Program Division, Export-Import Bank, 811 
          Vermont Avenue N.W., Washington, DC 20571; telephone 
          202-566-8873. The toll-free hotline telephone number for 
          advice and assistance to small businesses interested in 
          exporting is 800-424-5201.
          
          DEPARTMENT OF AGRICULTURE
          
          The FAS of USDA administers several programs to help make 
          U.S. exporters competitive in international markets and 
          make U.S. products affordable to countries that have 
          greater need than they have ability to pay.
          
          One effort to boost U.S. agricultural sales overseas is the 
          Export Credit Guarantee Program, which offers risk 
          protection for U.S.  exporters against nonpayment of 
          foreign banks. The program guarantees payment for 
          commercial as well as noncommercial risks. Private U.S.  
          banking institutions provide the operating funds. The 
          guarantee program makes it easier for exporters to obtain 
          bank financing and to meet credit competition from other 
          exporting countries.
          
          FAS also helps carry out food aid programs that provide 
          emergency food donations and long-term concessional and 
          commercial financing for U.S.  agricultural products. These 
          sales are intended to stimulate long-range improvements in 
          foreign economies and development of export markets for 
          U.S. farm products.
          
          Firms may obtain additional information on these financial 
          programs by contacting General Sales Manager, Export 
          Credits, Foreign Agricultural Service, 14th Street and 
          Independence Avenue, S.W., Washington, DC 20250; telephone 
          202-447-3224.
          
          OVERSEAS PRIVATE INVESTMENT CORPORATION
          
          OPIC facilitates U.S. foreign direct investment in 
          developing nations and Eastern Europe. OPIC is an 
          independent, financially self-supporting corporation, fully 
          owned by the U.S. government.
          
          OPIC encourages U.S. investment projects overseas by 
          offering political risk insurance, guaranties, and direct 
          loans. OPIC political risk insurance protects U.S. 
          investment ventures abroad against the risks of civil 
          strife and other violence, expropriation, and 
          inconvertibility of currency. In addition, OPIC can cover 
          business income loss due to political violence or 
          expropriation. Congress has authorized OPIC to support 
          selected equity investments under a pilot program.
          
          OPIC also provides guaranties, limited to $50 million, that 
          protect against both commercial and political risk. OPIC's 
          direct lending is aimed exclusively toward U.S. small and 
          medium-sized companies investing in projects overseas. OPIC 
          direct loans do not exceed $6 million.
          
          U.S. exporters and contractors operating abroad can benefit 
          from OPIC programs covering wrongful calling of 
          performance, bid, and down payment bonds and contract 
          repudiation. Under other programs, OPIC ensures against 
          expropriation of construction equipment temporarily located 
          abroad, spare parts warehoused abroad, and some 
          cross-border operating and capital loans.
          
          
          OPIC also provides services to facilitate wider 
          participation by smaller U.S. businesses in overseas 
          investment, including investment missions, a computerized 
          data bank, and investor information services.  For more 
          information on any of these programs contact OPIC's Public 
          Affairs Office, Overseas Private Investment Corporation, 
          1613 M Street N.W., Washington, DC 20537; telephone 
          800-424-6742 (202-457-7010 in the Washington metropolitan 
          area).
          
          SMALL BUSINESS ADMINISTRATION
          
          SBA also provides financial assistance programs for U.S. 
          exporters.  Applicants must qualify as small businesses 
          under the SBA's size standards and meet other eligibility 
          criteria.
          
          Under SBA's Export Revolving Line of Credit (ERLC) Loan 
          program, any number of withdrawals and repayments can be 
          made as long as the dollar limit of the line is not 
          exceeded and disbursements are made within the stated 
          maturity period (not more than 18 months). Proceeds can be 
          used only to finance labor and materials needed for 
          manufacturing, to purchase inventory to meet an export 
          order, and to penetrate or develop foreign markets. 
          Examples of eligible expenses for developing foreign 
          markets include professional export marketing advice or 
          services, foreign business travel, and trade show 
          participation. Under the ERLC program, funds may not be 
          used to purchase fixed assets.
          
          However, under the International Trade Loan program, SBA 
          can guarantee up to $1 million for facilities and equipment 
          (including land and buildings; construction of new 
          facilities; renovation, improvement, or expansion of 
          existing facilities; and purchase or reconditioning of 
          machinery, equipment, and fixtures), plus $250,000 in 
          working capital.  Applicants must establish either that (1) 
          loan proceeds will enable them to expand significantly 
          existing export markets or develop new ones or (2) they 
          have been adversely affected by import competition.
          
          Although SBA loans are generally limited to $750,000, 
          larger loans can be financed by using a cooperative 
          agreement between SBA and Eximbank.  This option may be 
          attractive to a company with an existing SBA loan or one 
          whose bank would prefer to work through a local SBA office, 
          since Eximbank is based in Washington, D.C.
          
          Both the ERLC and the International Trade Loan programs are 
          guarantee programs that require the participation of an 
          eligible commercial bank.  Most bankers are familiar with 
          SBA's guarantee programs.
          
          In addition, other SBA programs may meet specific needs of 
          exporters.  For example, SBA's contractor bond program may 
          help small exporters obtain bid or performance bonds if the 
          transaction is structured in accordance with SBA 
          requirements.
          
          For more specific information on SBA's financial assistance 
          programs, policies, and requirements, contact the nearest 
          SBA field office or SBA's Office of Business Loans, Small 
          Business Administration, 409 3rd Street, S.W., Washington, 
          DC 20416; telephone 202-205-6570.
          
          STATE AND LOCAL EXPORT FINANCE PROGRAMS
          
          Several cities and states have funded and operational 
          export financing programs, including preshipment and 
          postshipment working capital loans and guarantees, accounts 
          receivable financing, and export insurance. To be eligible 
          for these programs, an export sale must generally be made 
          under a letter of credit or with credit insurance coverage. 
          A certain percentage of state or local content may also be 
          required. However, some programs may require only that 
          certain facilities, such as a state or local port, be used; 
          therefore, exporters may have several options.
