National Export Strategy 2002 - International Trade Administration ...

The 2002 National Export Strategy
FAS will establish a broader set of customized export assistance services using a fee
structure that captures additional costs associated with providing matching services
and customized market research for individual clients.
FAS will revise the criteria for its branded promotion program to include participation
of medium-sized firms in addition to the small firms that are currently targeted by this
program. This will dramatically increase the number of SMEs able to take advantage
of this program.
More Available and Effective Trade Finance
New and experienced exporters tell us that as international markets become
increasingly competitive, financing decisions are driven by market concerns, with
timeliness and cost weighing heavily in the equation. Lack of access to competitive
financing is frequently cited as an obstacle to doing business internationally. Many
small business exporters report that their primary bank is unwilling (or unable) to
work with them in structuring international transactions. The bank may not be
comfortable with the firm’s foreign receivables or may lack the expertise to handle
currency fluctuation risks. Lenders report that the cost of doing the necessary
paperwork to support an individual transaction is fixed regardless of the size of the
transaction. This means that lenders would rather spend their time and resources on
larger deals where fees are more significant than on the smaller transactions usually
associated with small businesses.
Survey Results
Whatever the specific issue, exporters report the gap in access to financing can be
critical in deciding whether or not to pursue international business. The TPCC’s
survey of small business exporters found that fewer than half of them were aware of
federal programs for export finance or export credit insurance. Between half and twothirds
of these exporters have heard of Ex-Im Bank and SBA credit services, but fewer
than 5 percent have actually used them. The majority report that they finance their
exports using their own resources such as credit cards, home equity lines, or an
existing bank line of credit. Many report having lost sales due to their inability to
finance or to offer competitive terms to the buyer (Chart 6). Others (30 percent of
small firms and 39 percent of medium-sized firms) report serious problems in
collecting from foreign buyers.
Banks’ Perspective
Often, commercial bankers with whom the exporter has an ongoing relationship may
not be aware of the wide range of U.S. Government trade finance programs available.
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