coordinator: thank you all for standing by.welcome to today's conference call. at this time, your lines have been placed on listenonly for today's conference until the question-answer portion of our call at which time you willbe prompted to press star 1 on your touch-tone phone. please ensure that your line is unmuted.and please record your name when prompted so that i may introduce you to ask your question.
Ge Capital Credit Card Login, our conference is being recorded. if you haveany objections you may disconnect at this time. i will now turn conference over to ourhost, miss linda abbruzzese. ma'am you may proceed. linda abbruzzese: okay, thank you. and goodafternoon for those of you joined on the east
coast. good morning for those of you joinedon the west coast. thank you for joining us for the second webinar in our export-importbank webinar series on extend credit and get paid for your exports webinar. my name linda abbruzzese. and i'm a seniorinternational trade specialist for the global knowledge center at the department of commerce.this webinar is being brought to you by the global knowledge center of global marketsand export-import banks. and this webinar will talk about how exportcredit insurance can cover your commercial risk abroad, how the credit insurance enablesyou to sell in competitive, open account terms, instead of requiring cash in advance, andalso explain how financial support can help
you increase your sales in emerging markets. in a moment i'll turn this presentation overto mr. michael jackson, who's the director for the city-state partners and small businesstraining for export-import banks. our main speaker for today will be ms. pauline bell,who's the portfolio manager of the trade credit insurance for export-import banks. both of our speakers will be available atthe end of this presentation to answer your questions, and contact information can beprovided. now during this presentation, and during this webinar, there will be a question-answersession at the end of the webinar so that people can have an opportunity to ask theirquestions.
but first let's go through a little bit ofthe housekeeping details, make sure everyone gets the most benefit from this webinar. soyou will be able to hear this presentation via telephone and simultaneously through yourcomputer. so if you are not hooked up to both please take a moment to do this. and if you'reexperiencing any technical difficulties please press star 0 anytime during this presentation. now we will be taking, as i said, voice andwritten questions for today's webinar. so to ask a voice question please press star1 on your telephone. now we do invite you to type in questions on your screen as theyoccur to you during this presentation. there is an icon on top of the page with the lettersq and a. if you put your mouse's cursor on
this icon you can click and type in your questionanytime during this presentation. text questions will be answered by our speakers,and any of those questions which are not answered during this webinar due to time constraints,we will get back to you via personal e-mail. so just as a reminder for those of you who just joined us you can log in on theinternet conference as well. and now, with that, i'd like to introducelive online, mr. michael jackson, the director of the city-state partners and small businesstraining for export-import banks. thank you, michael. michael jackson: thank you, linda. it's sucha pleasure working with you and the department of commerce on this webinar series. thankyou all for joining the webinar today. i'd
like to introduce you to one of my esteemedcolleagues, miss pauline bell. pauline joined ex-im bank back in octoberof 2009, after graduating from georgetown university, with an m.s. degree in foreignservice, with a distinction of global commerce and finance concentration. prior to georgetownshe worked as an analyst at a boutique private equity firm here in washington. and she earneda bachelor's degree at emory university in atlanta back in 2004. allow me to introduce you all to pauline bell.pauline? pauline bell: thank you, michael, for yourintroduction. so let's get to the slides. and our first slide is the agenda, and duringthe course of this presentation, we will examine
ex-im bank's short term export credit insuranceproducts, and how they can support the u.s. exports financial objective. we will also look into ex-im's criteria forexporter and foreign buyer underwriting. and finally touch on the policy management, suchas shipment reporting and claim filing. the export-import bank is the official exportcredit agency of the united states. the bank enables u.s. companies, large and small, toturn export opportunities into real sales, help them to maintain and create u.s. jobs,contributing to a stronger national economy. ex-im bank does not compete as private sectorinsurers, but instead provides expert finance and products that seal gaps in trade financing.the bank assumes credit and country risks
that the private sector is unable or unwillingto accept. overall ex-im bank has grown significantly, with total authorization amounting to about$14 billion just five years ago. the bank's product suite includes free expertfinancing, such as working capital guarantees and loans, as well as buyer financing, suchas export credit insurance, long guarantees, and direct loans. no transaction is too largeor too small. on average over 85% of all transactions directly benefit u.s. small businesses. about 20% of bank's business is providinginsurance, both short-term and medium-term. the market for trade credit insurance remaingenerally (unintelligible) in 2013, with new capacity entering the private marketplace,keeping banks competitive. this translated
into lower overall 2013 figures for ex-imbank, which is generally considered a bank of last resort. we are top-heavy in latin american countries,with 35-40% of all transactions supported representing exports to mexico and south america.about 90% of all insurance transactions are sourced through ex-im authorized brokers.in 2013 approval rates stayed above 90%, but market penetration remains low. on to the export credit insurance. well, whatis it? it's actually an insurance policy and risk management product that covers the paymentrisk resulting from the delivery of goods or services. trade credit insurance is purchasedby business entities to ensure their country's
(unintelligible) from loss due to non-paymentof valid debt by the debtors. unlike other types of business insurance,once a company purchases credit insurance, the policy does not get filed away until nextyear renewal. but further relationship becomes dynamic. policy can change often, over thecourse of the policy period. and the company's credit manager plays an active role in thatprocess. the ultimate goal of credit insurance policyis not to simply pay legitimate claims as they arrive, but rather to help a businessto avoid foreseeable bad debt loss altogether through use of a variety of resources includingdata supplied by other policyholders to monitor any deterioration in the buyer's ability topay.
however, export credit insurance is not afinancial guarantee. it's actually a conditional product with certain policy requirements.it is also not a substitute for proven credit management practices, or routine bad debtprotection. finally, it is (non-threat) commercial dispute insurance. ex-im insurance and policies cover both commercialand political risk for periods not exceeding 365 days, and are renewed on an annual basis.trade credit insurance policies never cover 100% of the risk subsumed, and normally donot (unintelligible) 95% of the losses, thus insuring that the insured supplier is motivatedto manage its buyers prudently. credit terms are normally kept at 180 daysfor consumable products and for sales to distributors
wholesalers, while terms of up to 360 daysopen account can be considered for bulk agricultural goods and capital equipment. what are the export benefits? well, virtuallyevery aspect of a business is insured, except the most important, accounts receivable, whichtypically represents some 40-70% of the company's assets. a large insolvency is actually morelikely than a fire or theft, or other major property and casualty loss. a company's accountsreceivable are most vulnerable to unexpected losses and are likely to be affected by businesscycles. most importantly, they provide cash flow forthe business. thus obtaining credit insurance can aid in credit risk evaluation and reductionof (unintelligible) accounts concentration
levels. in the current environment, few companiescan effectively compete without extending credit to their buyers. obtaining credit insurancecan (unintelligible) to bad debt loss, and decrease bad debt write-off if a company's revolving credit line is securedby the countries receivable, a write-off of part of those receivables immediately impactscash flow. the same level of funds is no longer available for the company to run its day-to-dayoperations. it can also provide key account monitoring and backup support in the systemsto the company's existing credit department. the exporter also benefits through extendedfinancing opportunities, by utilizing export credit insurance, companies can borrow againstforeign receivables, and lower their financing
costs. reduction in bad debt reserves freesup working capital, and boosts the company's liquidity. it also converts non-taxable deductibleprovisions into a fully tax-deductible insurance premium. well, what types of policies does ex-im offer?ex-im short term insurance products consist of multi-buyer and single-buyer policies.a multi-buyer policy is whole turnover policy covering all of the company's export tradereceivables. premium rates on the first loss deductible on this policy reflect the averagecredit risk of the insurance portfolio buyers. for qualified small businesses, ex-im bankoffers small business multi-buyer policy carrying no first loss deductible, and a simplifiedpremium schedule. a reasonable threat of risk
multi-buyer policy allows exclusion of certainbuyers in all countries as long as at least 50% of the company's export portfolio is insuredby ex-im bank. these multi-buyer policies carry small discretionarylimits that allow the supplier flexibility to transact business with a new buyer, oran existing buyer, up to specified amounts, without prior ex-im bank approval. another policy type is an express policy,which is a main buyer policy geared towards small business exporters, with little or noexperience selling on credit terms overseas. all buyers are pre-approved by ex-im, withthe policy carrying no discretionary credit authority. insuring per-existing foreign buyersis optional. the maximum number of named buyers
on this policy is currently kept at 20. creditreports on all buyers the exporter elects to insure are complimentary, although theyremain with ex-im bank. and finally, a short-term single-buyer policyprovides credit protection for shipments to one specific buyer. premium rates are basedon (tenure), type of buyer, and the buyer's country. all short-term products carry thepay-as-you-ship feature. shipments may be reported anytime after the shipment is made,but no later than the 30th of the month following the month of shipment. as for pricing, we actually have a simplifiedpayment schedule for small business policy, and it is up on the screen. premium ratesfor the small business policy are determined
by the type of buyer, in terms extended. thepremium rate is not impacted by the country of destination. similarly, we have premium rate schedule forexpress policies. as you can see a slightly higher premium is charged to cover costs ofordering credit reports for all the buyers that the insured elects to cover with ex-imbank. as you can see pricing is per $100 of insured shipments. the next slide, we will discuss the exportunderwriting standards. there is several criteria that ex-im bank uses to determine when underwritingmulti-buyer and single-buyer policies. the main criteria is whether the exporter hasbeen in the same line of business for at least
three years, and whether they have any priorexport credit experience. we also look at the company's industry, project market, projectedmarkets in terms of sale, as well as the overall risk of their export portfolio. lastly we look at the company's own financialhealth, to determine that they have sufficient resources to prudently manage their creditdecisions. as far as the content rules, eligible products must have at least 51% u.s. content,including labor, but excluding markup, with exceptions for qualified small businesses.excluded from coverage are certain military and (decentralated) items, as well as salesto the military buyers. the next slide will give you a bit more detailabout the short-term u.s. content requirements.
the table contains both non-small businessrequirements and small businesses only. as you can see, small businesses have the optionto aggregate if the u.s. content is below 50% threshold, and still be covered for theu.s. portion of the goods to be exported. ex-im bank is currently closed in 16 countries.some countries also carry restrictions on the usage of the insurance discretionary creditauthority. please consult the country limitations schedule at our web site, the link is listedon the slide. finally we arrive at what do we do to makesure that the we monitor all our buyer exposure? again, depending on the limit, we have developedcredit standards which are available on our web site to ensure consistent and transparentcredit analysis. depending on the amount,
you could be required to only provide eithera credit report or a trade reference, or both. again, this is tied to the credit limit thatyou require for your particular buyer. when it comes to underwriting larger creditlimits, and by larger i mean the around, let's see, a million, we generally request provisionof the buyer's audited financials. the main criteria to determine the buyer's credit worthis the debt level, liquidity, debt service coverage, and ability to generate cash flow.we also look at the buyer's industry, and prior repayment experience, as reported bythe insured, the suppliers and financial institutions. subject to approval policy proceeds, in otherwords claim payments, may be assigned to financial institutions to arrange accounts receivablefinancing or add insured expert account receivables
to the (borne) base. an enhanced assignmentprotecting account receivables lenders from exported performance risk is available toqualified small businesses only. ex-im bank has a web-based application calledex-im online. it allows exporters to access their policy documents, file shipping reports,pay premium as well as file claims. the billing is listed at the bottom of the screen. claimsmay be filed no earlier than 90 days after the due date, and no later than eight monthsafter the due date. claims are usually viewed within 60 days ofreceipt of all required documents, which are usually purchase order, contract, invoice,and a bill of lading. the insured has to also show evidence of collection effort, and anyother requirements as specified in their insurance
policy. for any prospective applicants looking forhelp with their application please consult either ex-im bank broker, or your export financecenter. i have the contact information on the slide, you can also go on our website,which will take you to the database of our, all ex-im authorized brokers, as well as showcontact information for the local export finance centers. ex-im bank currently maintains 12 regionaloffices, branches and satellite locations. they're well-versed in all our products, andwill help exporters choose the best product for their needs. so i really encourage totalk to one of our exports experts, they will
help you with any questions, they will guideyou through the application process, so they're very knowledgeable folks, and i encourageyou to contact one of our experts. well this actually concludes my presentation. linda abbruzzese: thank you very much, pauline.and now we'll go to our q&a session. once again, if you have a voice question pleasepress star 1 on your telephone. and also, if you have a written question, there's thatq&a tab in front of you, where you can also write in your written questions. i just want to explain that it's a great opportunityfor you to ask a voice question, because pauline is here. she's an expert in her area and thistopic. so please take advantage of this time
that you have in this webinar to ask questionsfor pauline and michael as well. so i'll leave it to the operator to open the lines for q&a. coordinator: thank you. at this time, if youwould like to ask a question over the phone lines, please press star 1 on your touch-tonephone. please ensure that you're unmuted, and please record your name when prompted,so that i may introduce you to ask your question. once again, it is star 1 to ask a questionover the phone at this time. pauline bell: linda? linda abbruzzese: yes? pauline bell: there is a written question,so...
linda abbruzzese: yes. we're going to seeif there's any voice questions. and then yes, we'll definitely go to the written question. pauline bell: okay. linda abbruzzese: any voice questions? coordinator: we have no voice questions asof yet. linda abbruzzese: okay, great. so yes. paulinewe'll go to the first questions from (scott huey). the question is, does it make sensefrom the profit standpoint for a company that works off of small margins of 20% or less? pauline bell: absolutely. i mean, again, whenyou have smaller margins, it only makes sense
to have insurance just in case one of yourbuyer defaults, and that will create catastrophic effects on your bottom line and cash flow.and a lot of our exporters are wholesalers who operate on very tight margins. but then again, they do feel that the protectionafforded by having trade credit insurance in place helps them approach new buyers, enternew markets, and increase their sales, while protecting their bottom line and cash flow.so even if your, if the margins are very small, it actually makes more sense to get the insurancein place, because that way you are insuring yourself against any event of non-payment. the premium rate, as you've seen, if you qualifiedas a small business, the rates are pretty
low. and again, there is a feature of pay-as-you-ship.so as long as you have a shipment, you go online, you report that shipment, and thepremium. if you don't have a shipment that particular month, you're not obligated topay anything. so this is a great feature that allows ourexporters to spread the cost of having policy in place over a monthly period. so i think,for a company, again, that has a very small or tight margins, it actually makes more sensefor them to have the insurance in place. linda abbruzzese: thank you, pauline. we haveanother question, from (sela nowani). the question is, i was advised on ex-im bank andexport insurance, but was told that the requirements were very strict, and qualifications wereextremely hard.
pauline bell: well that is, i don't thinkthat this is true, and we do have challenging cases where we have to cover a lot of a lotof, i guess groundwork in order to go ahead and quote the policy. but the requirementsare not very strict. again, to qualify the exporter the main requirement is for you tohave been in the same line of business for three years. if you are a fairly new company, but yourcompany management has prior experience from their other places of work, or maybe theyhad a prior company that they ran, we can also look at the experience of the main executives.so qualifications, extremely hard, i cannot see that this is true.
the requirement, the only requirement thatwe are strict about is the u.s. content of the products or services to be exported. ithas to be either 50% or more. again if you are a small business, you have the optionto aggregate and have the insurance in just the u.s. generated portion of your exports. so it all depends on your situation. likei said, though, the approval rate is about 90% of all applications we take in, so thatshould tell you that we are working with all our exporters are here to help you. it's onlyin the cases where this is really difficult to quote a policy or it's clear that all theproducts were manufactured, let's say in china, not in the u.s., that's when we turn downthe exporter.
but our goal is to help our u.s. exporters,open new markets for them, helping them attract more buyers, for their goods. so i encourageyou to either give me a call so we can have this conversation, or contact one of our expertsat the expert finance centers, they will give you guidance as far as how it's best to approachex-im bank and what would be the best place for you to start, what kind of product willbest suit your needs? again, you know, all you have to do is try.there's no, usually there's nothing that you have to pay in order to apply. and our smallbusinesses, there's usually no cost to buying the policy. the only thing that you will haveto pay, is once you have the insurance in place and you start shipping, all you haveto do is report that shipment and pay a premium.
so i say go for it. linda abbruzzese: thank you very much, pauline.and, another question, written question, from (scott.) yes, scott, we will have copies ofthis presentation, for everyone who has registered this webinar and who is participating today.also, this will be recorded. and it will be on our web site. it will eventually be on www.export.gov. andwe can also send everybody a net replay immediately after, i say about a day or two after today'swebinar, you will get login instructions in how to view the instant recording of thiswebinar. another question here, from (phillip), iswe are joint manufacturers, and we are competing
with countries, such as, looks like chinaand india on a daily basis. trying to read through this, here, the question here let'ssee. pauline bell: (unintelligible) the rest ofthe question, but yes, a lot of our exporters... (crosstalk) linda abbruzzese: (phillip), if you can callin and press star 1 and ask your question through voice, we'll be able to get your fullquestion. once again, if, (phillip), you can dial star1 on your question and we can, you're on the telephone, we can your full question. coordinator: one moment, he'll be on. yourline is open, (phillip).
(phillip): okay. yeah, actually, i was typingup the questions, i thought i might as well have verbal question. on the u.s. content,where they say that it should be 50% or up, and when you have some items, like jewelryitems, which is gold and gemstones, and very difficult to prove the u.s. content, thenwhat do we do with that issue? pauline bell: well, to give you an example,you know, let's say we have an exporter who manufactures dresses. and let's say, you know,the dress itself was made in china. but then they imported it back into u.s., and put some,you know, some embellishments on it, like lace or some, you know, fancy buttons or something. and since that portion of that the work wasdone in the u.s., overall, spread overall,
of the unit cost, and that represents morethan 50%, then you are, i mean you basically met our requirement. but then, if you're asmall business, meaning you qualify as a small business per the (sbe) criteria, then youcan tell us the portion that is, you know, that is u.s. based, u.s. generated. and then you can have the cover of, it's justthat portion. pauline bell: i'm not sure about that exactsituation. again the best place to figure out if you're eligible for support from ex-imbank is to contact the local finance center, or you know, like i said, you can give mea call, we can have a discussion. just ask, i mean the best is to go and ask for advice.and then you can dig into details and see
what exactly you have. (phillip): okay would have your telephonenumber available at any time? pauline bell: yes. linda, do i just give itnow? linda abbruzzese: yes. pauline bell: are you going to.. linda abbruzzese: ...on your email or whateverworks for you. pauline bell: yes, my e-mail address is pauline.bell@exim.gov.my phone number is 202-565-3935. i actually cover companies that are located in the southwestregion. i have colleagues who cover the northeast, then they cover california. so it all dependson where you're located.
i might not be the one who gets to underwritethe policy. but i can give you general advice on how to proceed. again, go on our websiteto the link where we have for the original expert finance centers. choose it based onyour location. so if you're located somewhere close to houston, texas, you have a representativethere. you can talk to them. you know, tell them about your situation. and they'll adviseyou whether you have a viable transaction that we can support and go from there. (phillip): excellent. thank you. linda abbruzzese: okay. thank you. anotherquestion i have here is - looks like it's from (melissa). the question is - her nameis (melissa evans). the question is, how long
does the application process take? pauline bell: well, it depends on the situation.for the multi-buyer policy, we try to give you an answer within probably a week or twoweeks. if your plan's an express policy, again, this is a newer product where we act as yourcredit limiter. we try to keep the response time to five days. but then again, you know, everybody's situationis different. if you don't have any questions, if - once you receive your application again,the turnaround is pretty quick. if there are some additional questions on your corporatestructure or if you have questions on how you manage your portfolio, whether the buyer'sprofile, you know, we will follow up. and
that, of course, takes a bit more time. butusually turnaround times are pretty quick. linda abbruzzese: okay. thank you very muchpauline. and, once again, we still have a couple - you know, we have more time here.so once again, if you have any more important questions, please press star, 1. and, of course,if you have any written questions, please write them. pauline bell: just to add, on the prior question.when you go our web site, exim.gov, there is a tool sections where you have the actualapplication that you can print out and take a look at it yourself. you know, just to havean idea what kind of questions are going to be asked.
but what happens for almost all our experts,they go on ex-im online, they create a participant id and then they submit questions - they submitthe application on ex-im online and include any required information. you can attach anydocuments that you want to provide to ex-im bank. so, again, if you go to our web site, go underthe tools section and select the type of policy that you're interested in. and then you canget a preview of what you need to provide in order to see if you qualify for ex-im banksupport. linda abbruzzese: okay. great. it looks likewe got maybe another question here. coordinator: we do have one online as well.
linda abbruzzese: okay. let's go to the oneonline. coordinator: okay. it's from (gary helstem).your line is open, sir. (gary helstem): actually, i'm typing the questionin right now. i just got online. linda abbruzzese: okay. do you want to speakyour question? (gary helstem): okay. i'm part owner of acompany that is currently exporting product to china. the company has asked me to takeover the china business. i have no direct experience in the sales or in the exportingprocess. my role has been service and support for the china customers. so i travel to chinaoften. and i support the customers. and i do all that business.
i'm also an independent software consultant.so, i manage my own sales here and i write programs, custom programs for people for variousapplications. okay. so for the purposes of this business, where i would be taking theproduct from my company, which is - which i'm part owner in. they would ship the productto me. and i would then turn around and ship the product on to china. so - but i would be doing this as a new business,i wouldn't be doing this as part of my current business. so, am i going to have some issuesthere because i don't have direct experience, like you guys are saying, two to three years? pauline bell: well, again, three years meansoperating experience. so you're saying you
have no credit experience, basically. well,again, if your business qualifies as small business, according to the (sbe) standards... (gary helstem): it does. pauline bell: what you can do is you can askto see if you would qualify for an express policy where we pre-approved all your buyers.you tell us who your buyers are, we go out and collect some credit information. dependenton your - on the limit that you need. we might not ask you for any information. so once we approve all the buyers that youwant to sell to, then you can go ahead and when you have shipments, report the shipmentsonline, pay premium. you will be covered for
that particular shipment. (gary helstem): okay. woman: and again, because all the credit decisionsstay with ex-im bank, we might dealing in, as far as, you know requiring you to be inthe business for, you know, x amount of years or have prior experience. but are you tellingme, are you - the company that you're working at, is it, you know, like a one person operationor do you have other supporting staff? (gary helstem): well, my business only hasone employee. but i would not be doing this - i would not be doing the export businessout of my current business. i would open another business as a limited liability corporationand run the business - run the export business
out of that company. pauline bell: well, again, please tell usabout any of the prior experience you had prior to opening your current company. wewill take that into consideration. pauline bell: and again, you know, all thebuyers that you want to insure, there has to be an arm's length transaction. so if you'rehave any ownership in the - in the companies that you want to sell to, that is unfortunatelynot covered. (gary helstem): no, i don't have that. pauline bell: yes, so. that's good. (gary helstem): okay. but if i don't havethe experience, can i still go through the
express - the express... pauline bell: yes. this is the first policyactually geared towards the companies that either have no or very little experience sellingoverseas and open account terms. so i think for you it's actually the best product touse that this point. (gary helstem): okay. thanks a lot. pauline bell: again, you know, i encourageyou to talk to one of our experts at the expert sign up center. so what state do - are youlocated in? (gary helstem): california. pauline bell: california. well, we have - wehave three locations. you have orange county,
san diego and the third one escapes me, but... michael jackson: san francisco. pauline bell: san francisco. there you go.so you have a pick of regional offices to contact. and they're very knowledgeable folks.again, they will help you for all of - for all the steps in the process. so definitelycontact them and they'll help you out. (gary helstem): okay. so you have one in - waita minute, let me see. yes, san francisco. okay. pauline bell: yes, we have - like i said,orange county, san diego and san francisco. (gary helstem): excellent. okay.
linda abbruzzese: okay great. well, thanks(gary) for your question. and thank you, pauline. once again, if you have any more voice questions,press star, 1. any written questions, you can press in the q and a tab on your screen. operator, do we have any more voice questions? coordinator: we have no other questions atthis time. linda abbruzzese: okay. and i'm showing nofurther written questions as well. so, with that, we'll conclude. coordinator: excuse me, linda, i'm sorry.mr. (helstem) just re-queued up. linda abbruzzese: no problem.
coordinator: sir, your line is re-open. (gary helstem): okay. well, what are the costsof the premiums based on the dollar amounts of credit you need? pauline bell: is this the gentlemen from california,right? (gary helstem): yes. pauline bell: okay. well, on one of the slides,i actually have the premium rates for the express policy. (gary helstem): yes, i wasn't online yet.i just... pauline bell: that's okay. can you go to - let'ssee, slide number nine. if - well, i just
pulled it up, i'm not sure if you can seeit. (gary helstem): yes, i can see it, pauline bell: do you see pricing express policy?so if you organize our premium rates by the buyer type, as you can see, class one is asovereign. this is a buyer, like a government, you know, a government agency that has fullfaith and credit of their respective government. class two is a bank. so if you open the letterof credit, then you'll want to make sure that you get paid under the letter of credit. that'sthe second. but majority of our transactions are donewith the prior plan companies. that would be class three. so the rates are based onthe terms and to me - so you're selling software.
it's, you know, you're not selling services.usually the terms that are offered to that type of buyers start in the thirty and six,so you're looking at the rate of 65 cents for buyers in china or outside china. (gary helstem): actually, we're selling - we'reselling hardware. pauline bell: i'm sorry? (gary helstem): we're actually selling a product.hardware not... pauline bell: oh, okay. well, but then, dependenton - what's the - what's the terms that you usually give to your buyers? (gary helstem): (unintelligible) and makethem pay cash up front.
pauline bell: well, in the current environmentthat's tough to do and i know a lot of experts are being asked to offer up an account termsand that's the only way that the sale can take place. so keep in mind, the clock startswhen the goods leave u.s. pauline bell: so, you know, so for - whenyou calculate your total days that you give to this buyer, incorporate he shipping time.and, you know, to be safe, let's just say it's 30 days. so you've given them 30 daysfor the goods to arrive at the port of destination. and let's say you give them 60 days to repayyou. that's net 90 days term. again, our premium rates are done in the 60 days increments.so for up to 60 days, that's 65 cents. up to 120 days, that's $1.06 and so on.
the pricing is per $100 of insurance shipments.and you pay only when you have an actual shipment. it's - you have up to 30 days following thedate of the shipment to report - to report the shipments and pay premium. we don't ask you to prepay any of your premium.again, one of the best features of our policy is ability to plan and to spread out the costover the course of the year when the policy is in place. (gary helstem): okay. so i got a new questionhere. okay. let's suppose my product is $35,000. pauline bell: yes. (gary helstem): got it, got it, got it.
pauline bell: well, you see how it works,you tell us the buyer. (gary helstem): yes, i got it. all right.that makes sense. okay. go ahead and say what you were saying. (gary helstem): go ahead and say what youwere going to say. pauline bell: yes, sure. so how it works.we assign a credit limit to a buyer that you want to have on your policy. credit limitswork sort of like a credit card. so, let's say you have $1,000 on your credit card. youcan, you know, charge the $1,000, repay it and then use it again. same logic applieshere. so if you have a - let's say a $50,000 creditlimit for this buyer, you can sell to them
$50,000. they repay you, let's say 90 days.and you can ship again another $50,000 and you will be covered every single time. pauline bell: so. as long as you stay - youknow, the highest amount outstanding at any point in time is at $50,000 that you've gotto approved on. you're good to go. linda abbruzzese: okay. great. pauline bell: so once you have the shipment- you know you have the $50,000 shipment, you multiply it by the premium rate you haveand that's how much you're obligated to pay. (gary helstem): right. divide by 100 and thenmultiply by the premium rate. got it. right? pauline bell: yes. i mean, the process ispretty simply. and when you use ex-im online,
all you do is you select the buyer, you putthem under the shipment and the system will calculate the amount owed to you. so all youhave to do is pay by (ach) transfer or by credit card. (gary helstem): got you. okay. i think that'sit. i don't have any more questions. linda abbruzzese: okay. great. well, (gary),for your question. thank you, pauline. pauline bell: sure. linda abbruzzese: okay. well then, with that,we'd like to conclude today's webinar. you know, if you do have any more questions afterthis presentation, please feel free to write them down in the q and a section. also, we'llget that screen again. here's the most current
contact information that we have. if you need assistance with this information,please note also the websites because that's where you're going to get most of your information.also, please check out the u.s. (virtual) service - which is now called global markets- website at www.export.gov for more information on webinars like this, trade missions andevents. i'd also just like to remind everybody that this is the secondwebinar of the exit for import bank webinar series. so the third one is going to beginon july 8. so please note that. you can find that on export.gov website. we will also
be sending email blasts to everyone for, youknow, more information about that webinar. i'd like to thank michael jackson and alsopauline bell for your input and for your presentation. and thank you to all of our participants forjoining us today. thank you to everyone and that concludes our webinar. good bye. coordinator: that does conclude today's conferencecall. we thank you all for participating. you may now disconnectand have a great rest of your day.
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