By: Tabitha S. Etlinger, Esq., Associate, Saxon Gilmore & Carraway, P.A.
On June 30, 2015, the Congressional authorization for the Export-Import Bank of the United States (the “Bank”) lapsed. The Bank was a valuable tool for both established and novice exporters, providing an array of services that help to limit credit risks and increase available capital. Those services included low interest loans, loan guarantees, and credit insurance – opening international markets where potential customers do not have access to credit and providing working capital to U.S. exporters. The Bank will continue to service existing loans, guarantees, and policies, but it cannot process any new applications or engage in any new transactions unless and until it is reauthorized by Congress. There is a reasonably good chance that the Bank will be reauthorized by Congress, but until that time, exporters will have to look to other avenues to finance working capital and foreign sales. The Bank’s closure could leave many exporters with limited options to manage the risks in a transnational transaction, making it especially important to carefully review contracts, financing, and payment terms.
Saxon Gilmore is currently monitoring the status of any possible Bank reauthorization and will provide an update on our website should reauthorization occur. If you have any questions regarding your export transactions, please do not hesitate to call for a consultation regarding how we might help.
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