Ex-Im Bank's guarantee, offered to lenders, benefits U.S. exporters and their small and medium-sized business suppliers through accounts receivable financing. It is designed to inject liquidity in the marketplace and provide suppliers with access to capital, the bank said.
This program helps qualified Caterpillar suppliers obtain cash more quickly and increase liquidity to fulfill new orders. Exporters have the option to extend payment terms and obtain a working capital benefit without imposing undue financial hardship on their suppliers.
“Caterpillar’s suppliers are currently seeing cash flow improvements and working capital benefits as a result of discounting their accounts receivables in exchange for faster payment,” said Dani Cotti, global trade executive at J.P. Morgan Treasury Services, in a statement.
To participate in the Ex-Im Bank program, approved lenders must have an existing supply chain finance program. The bank requires at least half of the credit provided under the program be extended to suppliers meeting the small business definition of the Small Business Administration by the end of the 12-month term. The accounts receivable to be guaranteed must meet certain requirements, including U.S. content requirements related to the end-use products for export.
