Medium term source financing can refer to any loan with a "medium” length of repayment, but most often "medium term finance” refers to a financial arrangement between Ex-Im Bank and U.S. Exporters and buyers. Ex-Im Bank is the official export/import bank of the United States. In order to promote U.S. Jobs and the export of U.S. Products, Ex-Im Bank provides medium-term financing to buyers who otherwise would not be able to attain financing.
Typically normal banks are not equipped to take the kind of risk that Ex-Im Bank can take. The size of the transaction or even the location of the buyer may prohibit a normal bank from financing a buyer. Ex-Im Bank provides guarantees which allow these banks to finance buyers of U.S. Exported goods.
Medium term financing is only available for certain goods and services. In order to get financing, the goods or services must have a useful life over one year of time. Disposable goods will not qualify for this arrangement. Most often this type of financing is used for industrial equipment, heavy machinery, or items for nuclear power plants.
Even though the financing is for the buyer of exported products, this is a mutually beneficial arrangement. The U.S. Wants to export more products, the exporter (clearly) wants to export products, but if there are no buyers then this can’t happen. Ex-Im bank provides insurance to a lender that they can safely lend to the buyer even in a risky situation. The buyer is able to purchase U.S. Products�"it’s a win/win situation for all parties.
Medium and long term financing are phrases that mostly apply to international managers, exporters, or buyers of exported products. If you are a private individual with no ties to U.S. Export, it is unlikely that you will be dealing with this type of financing.
Typically normal banks are not equipped to take the kind of risk that Ex-Im Bank can take. The size of the transaction or even the location of the buyer may prohibit a normal bank from financing a buyer. Ex-Im Bank provides guarantees which allow these banks to finance buyers of U.S. Exported goods.
Medium term financing is only available for certain goods and services. In order to get financing, the goods or services must have a useful life over one year of time. Disposable goods will not qualify for this arrangement. Most often this type of financing is used for industrial equipment, heavy machinery, or items for nuclear power plants.
Even though the financing is for the buyer of exported products, this is a mutually beneficial arrangement. The U.S. Wants to export more products, the exporter (clearly) wants to export products, but if there are no buyers then this can’t happen. Ex-Im bank provides insurance to a lender that they can safely lend to the buyer even in a risky situation. The buyer is able to purchase U.S. Products�"it’s a win/win situation for all parties.
Medium and long term financing are phrases that mostly apply to international managers, exporters, or buyers of exported products. If you are a private individual with no ties to U.S. Export, it is unlikely that you will be dealing with this type of financing.
