Eximbank and KGF

Which needs does Eximbank look at?

Pre-export financing ties the need for raw materials, labour and working capital before shipment to an export commitment. An export-oriented investment loan can look at the machinery and plant investment of a production that exports or will export. Export credit insurance is not a loan. It is an insurance mechanism for the risk that a receivable is not collected after shipment. Product names, maturities and interest or profit share change in Eximbank’s own tariff. This page does not state a rate.

If a producer buying a CNC machine or a packaging line from China will present the machine as part of production aimed at export, Eximbank is approached through the investment-loan window. If the machine will be bought only for the domestic market, that window may be closed. The application is made through Eximbank or an intermediary bank, with export performance, financial structure and the investment feasibility. If the bank declines, China Desk TR cannot reverse that. China Desk TR’s contribution is to make the technical scope and delivery plan of the Chinese offer consistent with the credit file.

A KGF guarantee is not a loan

The Credit Guarantee Fund can support, with a guarantee, the collateral gap of a loan that a bank is prepared to extend. The guarantee ratio, ceiling and sector depend on the protocol between KGF and the bank and on the current programme. A working-capital loan is for day-to-day capital. An investment loan is for machinery, plant or a similar fixed asset. Presenting the price of a line from China as if it were a working-capital loan diverts the purpose of use from the document and causes problems in both the bank’s and KGF’s review.

The bank makes its own credit assessment. A guarantee does not automatically approve a file whose score is weak or which has no own funds. A letter of guarantee, a mortgage and a surety can be required together. China Desk TR does not allocate a limit for the bank or for KGF.

How an application proceeds and which documents are asked for

An Eximbank application proceeds on the form of the credit product that was chosen. In pre-export financing, the need for raw materials and labour is tied to an export commitment. In an export-oriented investment loan, the machinery list, the proforma, the delivery time, the financial statements, the ownership structure and the export link of the product to be made must sit in the same file. Export credit insurance is a separate application. A buyer limit and a policy after shipment do not replace a machinery loan. If an intermediary bank is used, the extra form the branch asks for is read separately from the current tariff on Eximbank’s site. This page does not state interest, commission or maturity.

On the KGF side, the business first goes to the bank it works with. If the bank finds the loan acceptable under its own assessment, the guarantee request is written into the protocol between the bank and KGF. A trade-registry extract, a tax certificate, a balance sheet, the identity of the partners and the investment offer are often requested. The full list changes by bank and is not frozen here. If the Turkish technical equivalent, the model code and the place of delivery are missing from a CNC offer from China, the bank may be unable to read the machine as an investment good. Tying an order that has already been paid in advance to an investment loan afterwards can lead to the purpose of use being refused. Writing a working-capital limit against the price of a machine is the same mistake. China Desk TR prepares the supplier search, the proforma and the transport calendar so that they do not contradict the credit file. It does not allocate credit, issue a guarantee letter or draw up an insurance policy.

Frequently asked questions