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Show The Utah Enterprise Review, March 9, 1977 Page 4b Rate Increases Approved Doing Business Abroad James E. by Ferguson Director ofMarketing, Salt Lake International Center The Public Service Commission has granted requests of three utility companies and three transportation companies to increase rates. The requests came from Mountain Fuel Supply Co., Utah Power and Light and Financing Exports As competition to enter international markets increases, so does the need to provide adequate credit to foreign prospects. Foreign credit, like domestic credit, can be risky. For this reason, private and governmental programs have been developed to minimize the risks and, therefore, encourage U.S. businesses to trade abroad. Before extending credit to an overseas firm, their credit worthiness should be investigated. Most local banks with international departments are in a position to obtain credit information on your prospective customer. The U.S. Department of Commerce also offers such information through use of the World Traders Data Reports" which are available at minimal charges. Dun and Bradstreet, the Foreign Credit Insurance Association Program and other private credit institutions also offer similar services. It is wise to avail yourself of these services before proceeding to sign a contract with a foreign firm desiring credit. Commercial banks have experts who can advise and arrange for financing for exporters or their overseas buyers. It is wise to maintain separate lines for export and domestic credit so neither will tie up the other. Even in such cases, you risk limiting your cash availability and it may be advantageous to seek outside credit sources. now offers its rural setting two additional days each week. Flowell Electric Association. The commission also approved requests from Bankers Dispatch Corp. for an increase in its rates, from Utah Valley Transit to discontinue its service to Geneva Steel Works, and from Wright Trucking Co. for permission to assume the authority of Hal E. Garner certificate to operate as a motor carrier. Enjoy French cuisine Tuesday through Saturday Brunch on Sunday and a Basque style dinner Sunday evenings 000 Phone 942-175- 1 for reservations. Pre-qualificati- on Export management companies (EMC's) are private organizations which often finance export shipments. EMCs may buy the products from the manufacturer and pay him in dollars, even before the shipment of goods is made. However, not all EMCs work in this way and the exporter should first clear the type of service which will be provided. To remove some of the risks involved in international transaction, the U.S. Government has initiated several programs to assist U.S. exporters and their overseas customers. The Export-Impobank of the U.S., more commonly known as Eximbank, is an independent corporate agency of the U.S. government whose main function is to "aid in financing and to facilitate exports of U.S. goods and services." It was established in 1934 and currently operates under the Export-ImpoBank Act of 1945 which sets the following guildelines: 1 . Loans shall be for specific purposes. 2. Banks should supplement not compete with private rt rt capital. Reasonable assurance of repayment must be obtained prior to extending guaranteed or insured loans. The three major programs of the Eximbank are briefly described below. Eximbank offers direct loans to foreign buyers for large projects and equipment sales requiring long-terfinancing. The exporter participates only when asked to take some part of the financed portion of the sale. Before granting such a loan, Eximbank must be reasonably sure that the dollar exchange in the host country will be sufficient to repay the loan and thecountrystotal dollar debt, weigh the effect of the loan on the U.S. balance of payments; and determine the feasibility of the project in terms of engineering, market potential and raw material availability. The repayment period varies with the project and may extend beyond five 3. m . year. The medium term guarantee program pertains to sales of capital goods such as industrial machinery normally having terms of 181 days to five years. This program is provided in cooperation with the Foreign Credit Insurance Association (FCIA) as protection to the exporter and his bank against political or economic risks. The exporter must bare at least 10 of the financed portion of the sale and the buyer must carry at least 10 of the invoice value. Commercial banks are obligated to finance these sales without recourse to the seller. Under the cooperative f:nancing facility, Eximbank makes available to an overseas cooperating financial institution one-haof the money needed to buy capital goods, components, and spare parts from the U.S. A 10 cash payment is required; the cooperating institution must lend the full amount of the financing to its customer. Banks with such facilities can be found in almost every part of the world and exporters are well advised to locate these facilities and make them known to their foreign trading partners. In my next column, I will continue a discussion of financing exports with an outline of the Foreign Credit FINE OFFICE FURNITURE INSTOCK lf Insurance Association. ? We offer tha foBowing options: BUY-RENT-L- EASE DESIGN SERVICE DELIVERY 485-105- 3 970 East 3300 South Sait lake City, Utah INSTALLATION WHOLESALE FROM SALT LAKE WAREHOUSE FACTORY DIRECT PURCHASING |