Export Enhancement Program
Export Enhancement Program is a financing tool for foreign buyers purchasing equipment from North Dakota manufacturers. Loans are made by BND and are guaranteed by the Export-Import Bank of the United States (Ex-Im Bank) utilizing their medium-term credits program.
Eligibility is based on the financial strength of the foreign buyer, and the financial and political stability of the country where the buyer is located, as determined by Ex-Im Bank. The loan requires a down payment of at least 15 percent of the contract amount prior to shipment, and a signed promissory note for the balance. Financing is provided to the foreign buyer. The financial strength of the exporter does not impact the approval decision of the buyer.
Proceeds will be paid directly to the exporter shortly after the equipment has been shipped to the buyer.
Minimum transaction size is $200,000. The amount of the loan to the foreign buyer will be the sum of the loan proceeds paid to the exporter shortly after shipment, plus any approved loan and guarantee fees the buyer wishes to finance. Ex-Im Bank guarantees 100 percent of both the loan principal and interest.
Interest rate: The rate will be established by BND and/or the referring lender. It is a floating rate based on a fixed spread over the 6-month LIBOR. At each scheduled semi-annual payment date, the rate resets to the current LIBOR base plus the fixed spread.
- Application fee: The foreign buyer is charged an application fee of $1,000 for administrative expenses by BND.
- Arrangement Fee, typically 1.50% of the transaction amount, will be charged to qualified buyers. An experienced trade broker will prepare the financial analysis, application and documentation. The fee is a minimum of $5,000 and is shared equally between BND and the trade broker.
- Exposure Fee, to be charged by Ex-Im Bank. Fee is based on the country of the buyer and the repayment term.
- Application and Exposure Fees and legal fees are all contingent upon loan closing. These are paid by the foreign buyer and are eligible to be financed as part of the loan.
Ex-Im Bank will typically require the filing of a first secured position in the equipment being financed. They may also require the personal guarantee of the owner of the foreign company.
Community financial institutions may choose to participate in the loans.
Loan term is based on the original transaction amount.
- Transaction more than $200,000: Up to 4 years
- Transactions more than $350,000: Up to 5 years
The loan is repaid in equal, semi-annual installments of principal plus accrued interest, beginning six months after shipment of the equipment.
The application steps are as follows:
- North Dakota lender contacts BND on behalf of the client who wishes to facilitate a sale through the program. The referring lender advises BND if they wish to participate in the loan and the level in which they would like to participate.
- BND provides an indicative loan quote and requests detailed information needed from the buyer for the application, including primary approval criteria.
- If the foreign buyer wishes to proceed with an application, the buyer sends the application fee to BND along with the previous three years of financial statements.
- After determining qualification, BND submits the application to the trade broker. The trade broker completes the financial analysis, application and documentation and submits the information to Ex-Im Bank.
- Upon approval, BND notifies the referring lender who informs the client and the foreign buyer.
- The loan will be completed under BND’s Master Guarantee Agreement with Ex-Im Bank. Ex-Im Bank approves all documents prior to funding.
- At the time of funding, BND pays the loan proceeds to the exporter and participates the agreed portion of the loan to the referring lender.
BND offers this loan by partnering with local lenders. To apply, contact your lender.
If you have any questions, contact us or call 701.328.5795.