Direct Loans

The FEFC will consider direct loans to exporters only when commercial lenders have turned down an exporter’s loan request even with the FEFC guarantee. This could occur when a transaction does not produce a profit for the lender. If the need of the exporter is post-shipment related (i.e., offering financing to the foreign buyer), FEFC will assist the exporter in applying for coverage under a foreign risk insurance policy, which mitigates the risk of an exporter loan default due to non-payment by a foreign buyer. However, many exporters needs will be for pre-shipment loans (e.g., purchasing the materials required to fill the order of a foreign buyer). Whenever possible, loan default coverage under an acceptable insurance policy or loan guarantee program will be obtained for pre-shipment loans.