Jim Burrows, Senior Vice President, Office of Small Business, EXIM02.14.19
American medical device companies are highly regarded and sought after for their innovative and high-technology products. While exports of United States medical products exceeded $41 billion in 2017, there is plenty of sales potential as 95 percent of the world population lives beyond U.S. borders. Furthermore, the combination of aging populations and longer life expectancies means this industry will continue to flourish. Given this scenario, the global medical devices market offers a tremendous opportunity for U.S. manufacturers.
Selling internationally, however, is justifiably overwhelming to many U.S. companies that want to increase sales by entering new markets or add new buyers in existing ones. Some noteworthy challenges exist, such as international competition, market access barriers, and uncertain economic conditions. Trade risks are inherent as well. Both commercial (e.g., bankruptcy or nonpayment) and political (e.g., war, terrorism, or the inconvertibility of currency) risks make many small businesses wary of selling internationally.
Getting paid is essential to keeping any business afloat, and research shows it is the primary concern of U.S. export executives. If foreign buyers don’t pay, there is very little recourse for the seller, and the financial hit can sometimes be significant. Consequently, many businesses are wary of entering international markets, let alone offering credit terms to their buyers.
Fortunately, there is a solution to eliminate worry and risks. Many American companies are exporting with fewer hurdles and with more confidence by partnering with the Export-Import Bank of the United States (EXIM). This U.S. federal government agency provides the financial support necessary to enable U.S. businesses of all sizes to mitigate risks and win international sales in more than 180 countries, even in emerging and frontier markets.
EXIM’s Export Credit Insurance is a popular product among U.S. medical device exporters. The insurance policy protects foreign accounts receivable generated by the sale of goods and services from U.S.-based companies to international customers. EXIM covers up to 95 percent of the sales invoice against nonpayment due to commercial and political risks.
Selling on Open Account
Export credit insurance also improves U.S. medical devices’ competitiveness in the world market. Many American exporters require cash in advance to avoid nonpayment while international competitors routinely extend credit to help gain a competitive advantage. Understandably, foreign buyers prefer and expect credit terms, as cash upfront has an adverse effect on their cash flow. American companies that are unable to extend credit may lose out on valuable opportunities.
EXIM’s support empowers U.S. businesses to negotiate credit terms with foreign buyers upfront. This is a powerful marketing tool and can be the competitive edge that wins deals. EXIM can cover a company’s entire portfolio of customers or a single buyer.
Offering open account credit terms to foreign buyers assisted Tactical Medical Solutions to increase sales. The company has a suite of products to address a broad spectrum of first responder medical needs in combat, including equipment for extrication and tourniquets for hemorrhage control. Demand for its products was growing worldwide, but Tactical had to figure out a way to work around the liquidity challenges of its customers. Tactical Medical’s foreign distributors needed to carry more inventories to improve delivery time to their end users. Many were not able to pay in advance and needed credit.
This 30-plus employee company turned to EXIM insurance. Offering open account credit terms positioned Tactical Medical to compete aggressively for new customers, especially in developing countries that have a need for its products but have limited access to reasonably priced credit. EXIM’s insurance allowed the company to expand without requiring cash in advance, while still protecting the company’s finances. The owner, Ross Johnson, is comfortable growing sales, knowing the company’s receivables generated by foreign transactions are protected from nonpayment. Tactical Medical Solutions is now doing business in 70 countries and supports worldwide brands like Marriott.
DemeTech Corporation is another company that turned to EXIM for assistance to grow its international sales. This Florida-based manufacturer produces and exports surgical sutures and blades to more than 100 countries around the world. Before partnering with EXIM, sales were flat, and overseas orders were small. DemeTech was unable to provide credit to its international clients, preventing it from procuring large orders, and the company’s clients often sought suppliers that offered open account terms.
The company now leverages export credit insurance to reach new markets, expand its workforce, and meet international client credit requirements. Since it began partnering with EXIM in 2000, DemeTech has more than quadrupled its revenue. Today, more that 80 percent of its revenue comes from customers in the Middle East, Europe, Asia, and Australia.
In addition to reducing the risk of nonpayment and credit terms, EXIM’s Export Credit Insurance can enhance a company’s borrowing capacity by assigning now-secured foreign receivables to a lender, improving liquidity, and easing cash flow constraints. After insuring its foreign accounts receivable using EXIM’s insurance, DemeTech was able to access working capital from its bank. The funds enabled DemeTech to expand its product line, purchase new equipment, automate many of its production methods, and compete with international manufacturers.
More than 80 percent of medical device companies in the United States consist of fewer than 50 employees. This market segment is important to EXIM, as more than 90 percent of the Bank’s total authorizations benefit U.S. small businesses.
EXIM has given many medical device companies the peace of mind and the assurance to win new international business. These companies can now fulfill the international demand for their products while also protecting their financial assets and improving cash flow.
Jim Burrows has more than 30 years of professional experience in both the public and private sectors of the financial services industry, including commercial banking, retail banking, and investment banking. Burrows joined EXIM Bank as the vice president of small business in October 2012 and was promoted to the senior vice president in 2013. Burrows has also held management positions at both large and regional commercial banks in the U.S.
Selling internationally, however, is justifiably overwhelming to many U.S. companies that want to increase sales by entering new markets or add new buyers in existing ones. Some noteworthy challenges exist, such as international competition, market access barriers, and uncertain economic conditions. Trade risks are inherent as well. Both commercial (e.g., bankruptcy or nonpayment) and political (e.g., war, terrorism, or the inconvertibility of currency) risks make many small businesses wary of selling internationally.
Getting paid is essential to keeping any business afloat, and research shows it is the primary concern of U.S. export executives. If foreign buyers don’t pay, there is very little recourse for the seller, and the financial hit can sometimes be significant. Consequently, many businesses are wary of entering international markets, let alone offering credit terms to their buyers.
Fortunately, there is a solution to eliminate worry and risks. Many American companies are exporting with fewer hurdles and with more confidence by partnering with the Export-Import Bank of the United States (EXIM). This U.S. federal government agency provides the financial support necessary to enable U.S. businesses of all sizes to mitigate risks and win international sales in more than 180 countries, even in emerging and frontier markets.
An Overview of EXIM The Export-Import Bank (EXIM) is an independent U.S. federal government agency that enables U.S. companies to enter new markets with confidence and increase sales in existing ones. EXIM products equip businesses of all sizes with the necessary tools to compete and win sales in international markets. EXIM empowers American exporters to grow their businesses by extending open account credit terms while protecting against buyer nonpayment, providing access to working capital to improve cash flow, and offering financing for buyers of capital equipment and services. More than 90 percent of EXIM transactions support small businesses; no business and no deal are too small. Visit www.exim.gov for more information. |
Selling on Open Account
Export credit insurance also improves U.S. medical devices’ competitiveness in the world market. Many American exporters require cash in advance to avoid nonpayment while international competitors routinely extend credit to help gain a competitive advantage. Understandably, foreign buyers prefer and expect credit terms, as cash upfront has an adverse effect on their cash flow. American companies that are unable to extend credit may lose out on valuable opportunities.
EXIM’s support empowers U.S. businesses to negotiate credit terms with foreign buyers upfront. This is a powerful marketing tool and can be the competitive edge that wins deals. EXIM can cover a company’s entire portfolio of customers or a single buyer.
Offering open account credit terms to foreign buyers assisted Tactical Medical Solutions to increase sales. The company has a suite of products to address a broad spectrum of first responder medical needs in combat, including equipment for extrication and tourniquets for hemorrhage control. Demand for its products was growing worldwide, but Tactical had to figure out a way to work around the liquidity challenges of its customers. Tactical Medical’s foreign distributors needed to carry more inventories to improve delivery time to their end users. Many were not able to pay in advance and needed credit.
This 30-plus employee company turned to EXIM insurance. Offering open account credit terms positioned Tactical Medical to compete aggressively for new customers, especially in developing countries that have a need for its products but have limited access to reasonably priced credit. EXIM’s insurance allowed the company to expand without requiring cash in advance, while still protecting the company’s finances. The owner, Ross Johnson, is comfortable growing sales, knowing the company’s receivables generated by foreign transactions are protected from nonpayment. Tactical Medical Solutions is now doing business in 70 countries and supports worldwide brands like Marriott.
DemeTech Corporation is another company that turned to EXIM for assistance to grow its international sales. This Florida-based manufacturer produces and exports surgical sutures and blades to more than 100 countries around the world. Before partnering with EXIM, sales were flat, and overseas orders were small. DemeTech was unable to provide credit to its international clients, preventing it from procuring large orders, and the company’s clients often sought suppliers that offered open account terms.
The company now leverages export credit insurance to reach new markets, expand its workforce, and meet international client credit requirements. Since it began partnering with EXIM in 2000, DemeTech has more than quadrupled its revenue. Today, more that 80 percent of its revenue comes from customers in the Middle East, Europe, Asia, and Australia.
In addition to reducing the risk of nonpayment and credit terms, EXIM’s Export Credit Insurance can enhance a company’s borrowing capacity by assigning now-secured foreign receivables to a lender, improving liquidity, and easing cash flow constraints. After insuring its foreign accounts receivable using EXIM’s insurance, DemeTech was able to access working capital from its bank. The funds enabled DemeTech to expand its product line, purchase new equipment, automate many of its production methods, and compete with international manufacturers.
More than 80 percent of medical device companies in the United States consist of fewer than 50 employees. This market segment is important to EXIM, as more than 90 percent of the Bank’s total authorizations benefit U.S. small businesses.
EXIM has given many medical device companies the peace of mind and the assurance to win new international business. These companies can now fulfill the international demand for their products while also protecting their financial assets and improving cash flow.
Jim Burrows has more than 30 years of professional experience in both the public and private sectors of the financial services industry, including commercial banking, retail banking, and investment banking. Burrows joined EXIM Bank as the vice president of small business in October 2012 and was promoted to the senior vice president in 2013. Burrows has also held management positions at both large and regional commercial banks in the U.S.