Export-Import Bank: Loan and Loan Guarantee Program Updates in Response to COVID-19
Fast Facts
The Export-Import Bank of the United States created or modified four programs to help businesses that export goods and services address the economic effects of the COVID-19 pandemic. For example, the Bank provided a loan through a new program, and either expanded or waived certain requirements to existing programs so that more borrowers could get help.
The Bank documented these relief measures and communicated them to the staff responsible for the programs. The Bank's Board of Directors also approved all transaction authorizations made under the programs and communicated these approvals in information that is publicly available on its website.
Highlights
What GAO Found
Using its existing authority, the Export-Import Bank of the United States (EXIM) developed four temporary relief measures for its loan and loan guarantee programs in response to the lack of liquidity and other export financing issues associated with the COVID-19 pandemic. EXIM's Board of Directors approved the relief measures in March 2020. Some of the relief measures expired in April 2022, while others remain in effect until April 2023.
EXIM created or modified the following four programs in response to COVID-19:
Bridge Financing Program. Newly developed to provide short-term financing for borrowers through direct loans to purchase U.S. goods and services while there was a lack of liquidity available through the private sector.
Pre-Delivery/Pre-Export Payment Program. Expanded EXIM's Pre-Export Payment Policy by extending financing eligibility to foreign buyers with long-term financing through commercial lenders and to manufacturing sectors whose foreign buyers had traditionally not participated.
Supply Chain Financing Guarantee Program. Temporarily modified EXIM's preexisting program to waive the 50 percent small business target for suppliers, allow U.S. exporters to make sales directly to foreign affiliates, and increase the guarantee coverage from 90 percent to 95 percent.
Working Capital Guarantee Program. Temporarily modified EXIM's preexisting program to expand the definition of eligible inventory, increase the guarantee coverage from 90 percent to 95 percent, and expedite implementation of a reduced and more understandable fee structure.
GAO found that EXIM documented program updates from the board-approved COVID-19 temporary relief measures and communicated the updates to personnel responsible for the related programs during staff meetings and through emails, memorandums, and press releases.
Additionally, EXIM's board directly approved all transaction authorizations made under the relief measures and communicated its approvals through board meeting minutes available on EXIM's website.
Why GAO Did This Study
EXIM helps U.S. firms export goods and services by providing a range of financial products, including direct loans, loan guarantees, and insurance, when private financing is not available, for example, during times of economic crisis. In response to the COVID-19 pandemic, EXIM implemented several temporary relief measures to inject liquidity into the market and provide increased financing flexibility to facilitate sales of U.S. goods and services abroad.
The Export-Import Bank Reauthorization Act of 2012 included a provision for GAO to periodically evaluate EXIM's policies and guidelines for its loan and loan guarantee transactions, among other things. This report discusses how EXIM updated its loan and loan guarantee programs and related procedures in response to COVID-19.
GAO reviewed EXIM's COVID-19 temporary relief measures and internal policies, as well as reports related to EXIM, and interviewed EXIM officials.
For more information, contact James R. Dalkin at (202) 512-3133 or dalkinj@gao.gov.