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Export-Import Bank: Loan and Loan Guarantee Program Updates in Response to COVID-19

What GAO Uncovered

Working with its current authority, the Export-Import Financial institution of the United States (EXIM) made four temporary relief measures for its financial loan and personal loan promise systems in response to the lack of liquidity and other export financing issues related with the COVID-19 pandemic. EXIM’s Board of Administrators authorised the relief steps in March 2020. Some of the aid steps expired in April 2022, although some others continue being in influence until eventually April 2023.

EXIM developed or modified the next four applications in response to COVID-19:

Bridge Financing Application. Newly made to supply shorter-term funding for debtors as a result of immediate financial loans to invest in U.S. goods and solutions though there was a deficiency of liquidity offered by the non-public sector.

Pre-Delivery/Pre-Export Payment Application. Expanded EXIM’s Pre-Export Payment Policy by extending financing eligibility to foreign buyers with extended-phrase financing by means of commercial lenders and to production sectors whose overseas prospective buyers experienced usually not participated.

Offer Chain Funding Promise Program. Briefly modified EXIM’s preexisting application to waive the 50 per cent modest enterprise target for suppliers, let U.S. exporters to make income instantly to international affiliate marketers, and enhance the guarantee protection from 90 % to 95 p.c.

Doing the job Funds Promise Method. Briefly modified EXIM’s preexisting application to extend the definition of qualified inventory, maximize the guarantee protection from 90 p.c to 95 %, and expedite implementation of a diminished and more easy to understand fee structure.

GAO observed that EXIM documented method updates from the board-authorized COVID-19 short term aid measures and communicated the updates to staff dependable for the similar courses for the duration of staff members meetings and as a result of e-mails, memorandums, and press releases.

Additionally, EXIM’s board right accredited all transaction authorizations built beneath the relief steps and communicated its approvals via board conference minutes obtainable on EXIM’s website.

Why GAO Did This Review

EXIM allows U.S. firms export products and solutions by supplying a range of money products, including immediate loans, personal loan assures, and insurance policy, when private financing is not offered, for example, in the course of periods of financial disaster. In reaction to the COVID-19 pandemic, EXIM executed various temporary reduction steps to inject liquidity into the sector and supply improved financing adaptability to facilitate product sales of U.S. merchandise and solutions abroad.

The Export-Import Lender Reauthorization Act of 2012 included a provision for GAO to periodically consider EXIM’s procedures and recommendations for its mortgage and mortgage assure transactions, between other things. This report discusses how EXIM up-to-date its mortgage and loan assurance packages and relevant techniques in response to COVID-19.

GAO reviewed EXIM’s COVID-19 momentary reduction measures and internal procedures, as effectively as studies connected to EXIM, and interviewed EXIM officers.

For extra facts, get hold of James R. Dalkin at (202) 512-3133 or [email protected]