Boeing enters supply chain finance guarantee program

   U.S. aircraft manufacturer Boeing will participate in the U.S. Export-Import Bank’s Supply-Chain Finance Guarantee program, which provides competitively priced working capital financing to suppliers of goods or services to U.S. exporters.
   Ex-Im Bank approved the Boeing supplier program in September 2011 with an initial capacity of $740 million. The bank can guarantee up to 90 percent of that capacity. Citibank N.A. will serve as the lender operating the program for Boeing’s suppliers. Boeing joins Caterpillar and Case New Holland as exporters currently participating in Ex-Im Bank’s program.
   The announcement was made last Friday during an event at Boeing’s manufacturing facility in Everett, Wash., where President Obama called for congressional reauthorization of Ex-Im Bank and announced executive branch initiatives to improve the competitive position of U.S. companies, particularly small businesses.
   “Eligible companies will be able to more quickly turn their accounts receivable into cash, helping them power more sales and support more American jobs,” Ex-Im Bank Chairman Fred. P. Hochberg said, while commenting about the Supply-Chain Finance Guarantee program.
   “Increasingly Boeing has called on small business to help us in sustaining export-related jobs. The Supplier Financing Program is a great tool to encourage this key growth area to prosper,” said Tom Dillon, Boeing corporate finance director who led the program’s implementation, in a statement.
   Ex-Im Bank’s Supply-Chain Finance Guarantee Program allows suppliers to receive early payment of their accounts receivable that are due from participating exporters, such as Boeing, in exchange for a small discount fee that is paid to the lender. The bank provides a 90 percent guarantee of the invoices while the lender (Citi for Boeing suppliers) bears 10 percent of the risk.
   Under the program, approved lenders must have an existing supply-chain finance program. Ex-Im Bank has set a target that at least 50 percent of the credit be extended to suppliers that meet the definition of a small business as defined by the U.S. Small Business Administration by the end of the 12-month term. The end products must be for export and meet Ex-Im Bank’s requirements for U.S. content.