Export Your Michigan Products Worldwide — A Strategic Opportunity to Grow Revenue

This article appeared in the Mar/Apr 2024 issue of MiMfg Magazine. Read the full issue and find past issues online.

With state and national exports continuing to show strong growth, international trade represents a key opportunity for Michigan manufacturers to find new markets, expand sales, and increase profits. The Export-Import Bank of the United States (EXIM) can equip businesses with the financial tools they need to capitalize on potential markets worldwide.

Recent data tracking the upward trajectory for both Michigan and U.S. exports illustrates the possibilities:

• For the second year in a row, U.S. exports of goods and services surpassed $3 trillion with a 1.2 percent increase in 2023, according to the U.S. Bureau of Economic Analysis.
• In Michigan, the numbers are even stronger. Export growth has rebounded significantly from $44.9 billion in 2020 to $64.9 billion in 2023 — a 45 percent increase to the highest export level in the past 10 years, according to data from the International Trade Administration.

Factor into those trends that 95 percent of consumers are located outside the United States, and it becomes clear that exporting offers substantial opportunity for Michigan manufacturers seeking to grow revenues.

EXIM is a federal agency that provides trade finance tools to help U.S. businesses sell goods and services abroad. There are government resources available to assist at every step along the way. Here are ways EXIM can help Michigan manufacturers start or expand their export business.

Get Paid: Export credit insurance is an insurance policy, like a policy for a house or car, that provides coverage on accounts receivable generated from international sales. That allows businesses to manage the risk involved with selling abroad, including concerns about not getting paid by a customer in another country.

Offer Credit Terms: While it may seem like sound practice to require customers to pay cash in advance, many companies soon realize that approach can cost them business. Export credit insurance empowers them to extend favorable credit terms, which can be a competitive advantage in winning new customers and increasing sales to existing customers. An added benefit is that lenders often accept insured foreign receivables as collateral, which expands a company’s borrowing base and strengthens its cash management.

Generate Cash Flow: A working capital loan guarantee offers exactly what it sounds like — a guarantee to lenders so they will be more willing to lend money to purchase or manufacture goods and services destined for export. Lenders are more likely to include foreign receivables and inventory in the borrowing base when those receivables are insured. The collateral for the loan is the export- related inventory itself (including work in progress) as well as the foreign accounts receivable generated from the sale of the products.

Make More in America: Domestic financing tools designed to encourage U.S. manufacturing tied to exporting are now available, with medium- and long-term loans, loan guarantees, and insurance available for export-oriented domestic manufacturing projects.

About the Author

Jane Lemons is a Business Development Specialist with EXIM. She may be reached at 800-565-3946 or wb.outreach@exim.gov.

Export-Import Bank of the United States (EXIM) is an MMA Premium Associate Member and has been an MMA member company since January 2024. Visit online: exim.gov.