Ex-Im Bank: A Resource For African-American Entrepreneurs with Eyes On Africa

For entrepreneurs of color who have a business plan and have scoped out an African country in which to do business, most times the only obstacle left is financing.

It’s that simple. Without adequate funding the business enterprise is not getting off the ground.

A valuable, relatively unknown resource for African American investors is the U.S Export-Import Bank, the official export credit agency of the United States. Ex-Im does not compete with private institutions. It works with lenders and brokers to ensure that U.S. businesses get what they need to sell abroad and be competitive in international markets.

The Bank was first established around the time of the Great Depression and recently celebrated its 80th Anniversary.

60 countries around the world have comparable agencies and the Ex-Im Bank’s mission is to support and sustain US job growth by helping to encourage and facilitate exports through financing.

BlackEnterprise.com reached out to Ex-Im First Vice President and Vice Chair, Wanda Felton, to discuss the topic. She tells BE, “There is an enormous opportunity for American businesses to sell their products and services in the global marketplace. In many cases, companies are unaware of what financing support is available to assist them. Some have misconceptions about the level of risk. And that’s where the bank comes in, to bridge the gap so that companies interested in exporting their products to Africa can do so.”

She also says most African American entrepreneurs have no real concept how competitive the world of global exporting really is and what American companies face when trying to sell their products and services overseas in terms of foreign competition.

That’s where Ex-Im comes in. To provide financing to help companies get out of the country and conduct business abroad.

Felton tells BE, “We can provide financing, working capital to help fill their orders when they can’t get a bank loan. Ex-Im bank can help them by providing a guarantee to a commercial bank that would incentivize the bank to lend to a small business.”

Besides financing assistance the bank also provides loan guarantees, insurance policies and export credit insurance and direct loans to foreign buyers. Theirs is a system that helps alleviate concerns about risk.

President Obama put it this way during the US Africa Leaders Summit in Washington this summer.

“If I’m a Ford Dealership and there is a Toyota Dealership across the street that offers financing and I don’t, guess who wins the sale?”

Felton concurs she says, “Having an opportunity to finance a purchase can make all the difference in the world – between buying American and buying from some other country.”

So can an average Joe just walk into the Bank and ask for assistance? Well, Yes and No.

Felton tells BE, “We are not a development agency. We are a government owned bank and we do have to find a reasonable assurance of repayment in order to make a loan.”

In other words you have to be creditworthy. Ex-Im also has to be open for business in the country where you plan to export. The bank also does not finance military equipment.

Besides these requirements the bank is ready, willing and open to do business.

“The reason we want more companies to export is because 95% of the world’s consumers are outside the United States. When President Obama took office one of his early economic initiatives was to promote exporting as a way for companies to grow.

Ex-Im has been doing business with several African American entrepreneurs, including Equip XP in Texas. The company exports heavy equipment to Sub-Saharan Africa. They’ve used two kinds of financing from Ex-Im bank. The Working capital guarantee program and the Insurance policies.

Felton tells BE, “We’ve been doing business with them since 2008. Back then they only had two employees, now they have 13 here and 30 others in Ghana and Nigeria, all due to Ex-Im assistance. We do a lot with small businesses. They were involved in 90% of our transactions last year.”

According to Ex-Im, a big barrier preventing entrepreneurs from engaging in Africa’s emerging markets is a lack of awareness about the products and the support available to help them succeed.  Only 1% of US small businesses do any kind of exporting at all and the ones that do deal predominantly with just one country.

Felton says she knows it’s difficult because of the comfort-level but that’s where Ex-Im comes in.

“We try to help by filling gaps in the private sector and supporting the sale of American goods and services across the globe. ”

The bank is in the business of helping out minority and women owned businesses. Take a look at the numbers below to see how much has been invested in MWOB’s.

MWOB Transaction numbers:

Dollar                                          Transaction

FY2010                  628,274,969                                        570

FY2011                  719,748,632                                        606

FY2012                  838,338,050                                        685

FY2013                  815,559,257                                        765

For FY2014: Ex-Im authorizations supported MWOB exports valued at more than $2 billion.

Source: Ex-Im