For the past 65 years, the Export-Import Bank has helped support more than $370 billion in US exports world wide. As time and conventions have changed in the financial sphere, so has the Ex-Im Bank.

The bank has shed the stodgy-banker image of the past and it has entered the Internet Age with its processes. Further, its programs are being changed as the changing times and circumstances dictate.

Eroding the Bureaucracy

The accession of James A. Harmon as chairman of Ex-Im could have a lot to do with the agency's slow, but sure, steps toward being more customer friendly. Harmon comes from the private, rather than the governmental, sector. As a spokesman at one large multi-national bank told World Trade, "We used to say, 'Ex-Im? They're great if you have to use them, but God knows you don't want to use them if you don't have to, because they're such a pain in the neck.'"

He goes on to explain, "They're eliminating some of the bureaucratic rules associated with some of the programs. They're much more sympathetic to data-collection problems and things like that."

Ex-Im has also simplified some aspects of contract administration. For example, in the past, if a project involved environmental benefits, one could draw down 15% of the local costs under the Ex-Im financing arrangement along with the 85% US portion. That 15% had to be pro rated with the Ex-Im portion. Today, those costs can be drawn down when local costs have to be paid for, which generates flexibility on how funds are used during the course of construction.

Expedited Paperwork

Jimmy Breslin once wrote that for the people who work inside Washington, D.C., the part of the country lying outside the Beltway is nothing more than an oblong statistical blur. This detachment from reality, from understanding that not everyone can-as can a government worker-depend on income whether work is done or not, is undoubtedly one of the reasons paperwork wends slowly through a federal agency much like a leaf wends its way down a gently flowing river.

At the Ex-Im Bank, things are changing in that respect. To a degree.

"Ex-Im documentation," says a spokesperson at one large international bank, "is still onerous, but they have improved."

If a bank takes 5% of the exposure, for example, Ex-Im will process the paperwork more rapidly. In general, processing is quicker for insurance than for guarantees in general. This is part of Ex-Im's Medium-Term Individual Delegated Authority Program. In many cases, Ex-Im can deliver a decision in two days under this program.

Ex-Im also has mandated a 20-day maximum turnaround time for short- and medium-term credit criteria if the transaction is $5 million or less.

Flexibility and Adaptability

Although the paperwork will always be with us, one area where Ex-Im shines is in trying to adapt to global changes in circumstance and opportunity.

For example, although Ex-Im is "a trade agency, not an aid agency," in Chairman Harmon's words, the bank is more open to financing projects that in some ways cross that boundary. For example, Ex-Im in January provided financing for Turkish borrowers who were rebuilding from the ravages of serious earthquakes in that country.

Ex-Im Bank also announced it would provide $1 billion a year in five-year-term financing to support sub-Saharan Africa's purchase of US HIV/AIDS medications and related equipment and services.

In other areas, Ex-Im Bank has also loosened up.

With the Foreign Currency Guarantee program, the bank guarantees loans denominated in a country's local currency. With this program, US exporters can offer foreign buyers the choice of either a dollar-denominated loan from Ex-Im Bank or a foreign-currency-denominated loan from a commercial bank. Currencies covered are the French franc, German mark, Japanese yen, Swiss franc, British pound, South African rand, and the Indian rupee.

There is more leeway insofar as credit rating is concerned, as well. The bank will consider accepting the credit of sub-sovereign governments whose foreign-currency debts are not in default and are rated B/B2 or stronger by an accepted global credit-rating agency. In particular, this program affects sub-sovereign entities in Argentina, Brazil, Bulgara, China, Colombia, Croatia, Czech Republic, Estonia, Latvia, Malaysia, Poland, Slovakia, and South Korea.

Ex-Im Online

Over the past year and a half or so, Ex-Im has been experimenting with online letters-of-interest. Chairman Harmon says, "Ultimately, we expect to process many applications online. We can finance a car and get a mortgage online. Why not finance an international deal over the Internet?"

Of course, if it still takes 20 days to process the application, few people will be interested in using the Internet with Ex-Im. The Internet is inherently now, not next month.

Sidebar:Ex-Im Bank Program Highlights

The following are some highlights of the Ex-Im Bank's medium- and long-term programs.

Direct Loan Program

Fixed-rate loans made directly to foreign buyers of US goods and services. Eligible exports are capital equipment, large-scale projects, and related services. The loans generally involve amounts greater than $10 or a repayment term of five or more years. Amounts under $10 million are ordinarily financed by a domestic financing institution or third party and Ex-Im Bank support takes the form of a guarantee.

Guarantee Program

Repayment protection for private-sector loans to credit-worthy buyers of US exports. Eligible exports are capital equipment, projects, and services. Ex-Im Bank guarantees that, in the event of default, it will repay the principal and interest on the loan. The foreign buyer is required to make at least a 15% cash payment. The comprehensive guarantee covers 100% of the commercial and political risks. Guarantees covering only political risks are also available.

Export Credit Insurance

Ex-Im Bank offers a wide range of policies to accommodate many different export credit-insurance needs. These policies include special coverage for small-business, multi-buyer, short-term multi-buyer, single-buyer, short-term single-buyer, medium-term single buyer, financial-institution buyer credit, letter of credit, leasing, and special policies.