For the mid-sized and smaller exporter, borrowing preshipment working capital can make all the difference. Closing the sale is just step number one. Next comes fabricating or assembling the product sold, which brings a price tag. If the exporter can't marshal the funds internally, it will have to borrow from a bank or finance company.

And, for some, that can be daunting: the company may already have hit the borrowing limit approved by its regular lender; or it may land a sale that's a lot larger than usual, making the lender uncomfortable. Further, it may have borrowed until now only to handle domestic orders, and the lender won't take the risk of export receivables.

Another possibility is that businesses that borrow from finance companies discover that many of them exclude export receivables from the borrowing base on which their lending is calculated.

But, there's some good news out there. More banks and finance companies are now making export working capital a priority activity, so it's more available (though not always for smaller firms).

The Export-Import Bank, in particular, is pushing aggressively to encourage more of these loans. It now works with 120 lenders (banks and finance companies), providing guarantees that cover most (90 percent) of the risk. In its fiscal year 2002, Ex-Im Bank approved $680 million in working capital guarantees, and is likely to do a bit more in 2003, despite a sluggish export environment.

But it hopes to reach the $1 billion mark, once a new package of program improvements is in place, says Sam Zytcer, vice president for Small and Medium Enterprises, who has run the program for several years.

About 90 percent of Ex-Im's working capital business is handled by experienced lenders who have been given "delegated authority" (they can commit the Bank on a transaction without applying for its OK). And it's now moving to raise the per-deal ceiling under the arrangement to $25 million for the larger lenders, which is expected to boost the volume of business.

Exporters are also due to get a fresh incentive. They will be able to submit a single application for both working capital support and the Ex-Im multi-buyer credit insurance policy, thus speeding up the process, and receive a discount in the fees involved to boot.

The average transaction under the program is $1.7 million, but deals range from as small as $50,000 up to $30 million. American Science & Engineering in Billerica, Mass., which makes cargo security detection equipment, received a $20 million credit from its bank with an Ex-Im guarantee. So did Horizon Drilling in Texas, which sells a lot of equipment to PEMEX, the Mexican oil company.

At American Science & Engineering, the credit line, with HSBC Bank, is considered "essential from time to time, as our cash flow fluctuates," said Ted Owens, vice president and CFO. The company mainly uses the line to back the use of letters of credit and large downpayments.

Meanwhile, the growing popularity of the program is revealed in the fact that lenders are busy hiring Ex-Im officials to manage their export working capital portfolios. Compass Bank in Houston hired Bill Prout, Fleet Bank in Boston brought in Bob Haight, M&T Bank in Baltimore hired Gerry Solomon, and GE Capital relies on Bob Chadwick.

Who are the lenders?

The banks and finance companies in this business run the gamut from large multi-state institutions, such as Wells Fargo Bank, Comerica Bank, and GE Capital, to smaller groups such as Greater Bay Bank in San Francisco and World Trade Finance in Los Angeles.

Here's a brief road map to the lenders, how they are organized to handle the program, where they deliver it, and how to find one to work with.

First, there's a small group of large multi-state banks and finance companies that deliver this financing wherever they have a presence (which can be one or two dozen states for some, or even nationwide for a few).

In some cases, they offer export working capital through asset based lending (or business credit) units, which focus on mid-sized or smaller firms. These groups rely on assets such as export receivables and inventories of exportable products for the security of the transaction.

Wells Fargo Bank, for example, delivers the service through five groups: Wells Fargo Business Credit, Wells Fargo Foothill, Wells Fargo Commercial Banking Group, Wells Fargo Business Banking Group, and Wells Fargo HSBC Trade Bank (a joint venture with London-based HSBC Group).

But, other multi-state banks offer export working capital through either their international divisions or their middle market lending units. Most banks or finance companies that work through multiple locations centralize the administration of the Ex-Im program in a single place and with a single person who has the expertise.

Thus, Bank One centers it in Dallas with VP Martha Gentry, while Wells Fargo focuses it in Los Angeles with Brett Marschall, Compass Bank with Bill Prout, and Fleet Bank with Bob Haight.

The list of lenders that do the largest volume of Ex-Im working capital business includes Silicon Valley Bank (Santa Clara, Calif.), Wells Fargo Bank, Bank of America, PNC Bank, Comerica Bank, Fleet Bank, and Bank One, plus two finance companies, GE Capital, and CIT Group.

What's more, it is common practice for asset-based lenders to combine working capital finance for domestic business with export operations, and to rely on the Export-Import Bank to cover the risk only on the international side.

In fact, Ex-Im Bank likes it that way, and sees this group of lenders as a good fit for the program. "They know the business, and the industries they serve," says Sam Zytcer. Six years ago, Ex-Im joined the Commercial Finance Association, the finance company industry group, to encourage its asset-based lender members to enter export finance.

At the same time, avoid overlooking the smaller finance companies and banks that give it a high priority. In Los Angeles, World Trade Finance, which does nothing else, has been around for 15 years, and has branched out beyond California to other Western states, with plans to go national. Greater Bay Bank in San Francisco is in the top ten in the Ex-Im program.

To find a bank or finance company, either in your neighborhood or beyond (some work nationally, and a few will finance exporters that are not otherwise their clients), take a look at the Export-Import Bank's web site, www.exim.gov. In its "partners" list, you will find the lenders that have received delegated authority. These are the folks that do 90 percent of the Bank's working capital business. Ex-Im has also recently created a Lender Locator service that helps match up exporters with banks and finance companies through its web site.

Sidebar: U.S. Manufacturers to Benefit From New Export Assistance to Pakistan
By Patrick Burnson

The Export-Import Bank of the United States renewed a short-term, letter of credit program under which Ex-Im Bank will insure irrevocable letters of credit that are issued by three major Pakistani banks-National Bank of Pakistan, Muslim Commercial Bank, and United Bank-and confirmed by U.S. banks. The program will support up to a total of $125 million of U.S. exports to Pakistan of consumer goods, spare parts, raw materials and bulk agricultural products on payment terms of up to 360 days.

"This program can facilitate U.S. exports to Pakistan that otherwise could not go forward," said Ex-Im Bank Chairman Philip Merrill. "We want to demonstrate our confidence in the strength of Pakistan's major banks and encourage U.S. exporters to seek out sales opportunities in this market."

Although Ex-Im Bank is closed for routine transactions in Pakistan, the short-term, letter of credit program will enable U.S. exporters to sell a wide range of goods on short terms of sale. Ex-Im Bank's Country Limitation Schedule (CLS) is available online at www.exim.gov.

Sidebar: Where's the Money? Ingersoll Rand Outsources IT for Answers
By Patrick Burnson

When multinational manufacturing giant, Ingersoll Rand Corp., began searching for ways to leverage its freight payment system, a third-party tech solution was close at hand.

"I've been with the company for five years," says Tony Bozzuto, director of global logistics for Ingersoll Rand in Huntersville, North Carolina. "But I discovered that we already had an outsourcing partner taking care of this particular function."

Founded at the dawn of the computer age-1968-TCI has been providing scores of major corporations with a reliable freight bill payment system designed to circumvent a great many problems inherent to an "in house" auditing department. "The relationship goes back about 20 years," says Bozzuto, "and it has been among the most consistent performers for us."

Key to Bozzuto's mission is finding and concentrating services. He is charged with purchasing new technology, and must also establish relationships with third-party logistics providers. When it was time for him to examine the existing bond with TCI, though, the search came to a halt.

"On a domestic basis, they do everything we require," he says. "We are not concerned about losing custody of the information, either, since they provide regular records for us to archive and refer to."

TCI's client base is as diverse as it is impressive, including such names as Schlage Lock Co., Thermo King Co. and Sara Lee Corporation.

The company recently announced the launching of DataScan, which allows its clients to access all their billing, audit and logistical information 24-hours each day, anywhere in the world. It also offers them the ability to receive only the information they desire.