Export Guarantee Program
Program Funding
Annual program obligations reported to SAM.gov.
Program Objective
The U.S. Department of Agriculture's (USDA) Export Credit guarantee Program (GSM-102) provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products, while providing competitive credit terms to buyers. By reducing financial risk to lenders, credit guarantees encourage exports to buyers in countries, mainly developing countries that have sufficient financial strength to have foreign exchange available for scheduled payments. The program guarantees credit extended by the private banking sector in the U.S. (or, less commonly, by the U.S. exporter) to approved foreign banks using dollar-denominated, irrevocable letters of credit for purchases of U.S. food and agricultural products by foreign buyers. USDA's Foreign Agricultural Service (FAS) administers the program on behalf of the Commodity Credit Corporation (CCC), which issues the credit guarantees. GSM 102 covers credit terms of up to three years; maximum terms may vary by country.
Eligibility
Eligible Applicants
- Unrestricted by Entity Type
Export Credit guarantee Program (GSM-102) provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products, while providing competitive credit terms to buyers. By reducing financial risk to lenders, credit guarantees encourage exports to buyers in countries, mainly developing countries, that have sufficient financial strength to have foreign exchange available for scheduled payments. This Program provides guarantees to lenders.
How to Apply
Award Procedure
The CCC-approved foreign bank issues a dollar-denominated, irrevocable letter of credit in favor of the U.S. exporter, ordinarily advised or confirmed by the financial institution in the U.S. agreeing to extend credit to the foreign bank. The U.S. exporter may negotiate an arrangement to be paid as exports occur by assigning to the U.S. financial institution to the right to process that may become payable under the CCC's guarantee. Under this arrangement, the exporter would also provide transaction-related documents required by the financial institution, including a copy of the export report, which must also be submitted to CCC.
Please contact the headquarters or regional office for addition approval information.
Program details & compliance
Description
The GSM-102 program provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products.
Mission Categories
Primary: Marketing Opportunities
Other categories:
International
Use of Funds
Allowed Uses
CCC guarantees payments due from approved foreign banks to exporters or financial institutions in the U.S. However, the financing must be obtained through normal commercial sources. Typically, 98 percent of principals and a portion of interest are covered by a guarantee. because payment is guaranteed, financial institutions in the U.S. can offer competitive credit terms to the foreign banks, usually with interest rates based on the London Inter Bank Offered Rate (LIBOR). Any follow-up on credit arrangements between the foreign bank and the importer are negotiated separately and are not covered by the CCC guarantee.
Restrictions
Guarantees issued are for the export of eligible U.S. agricultural commodities only.
Reporting & Compliance
Applicable 2 CFR 200 Subparts
- Subpart B — General Provisions
- Subpart C — Pre-Federal Award Requirements
- Subpart D — Post-Federal Award Requirements
- Subpart E — Cost Principles
- Subpart F — Audit Requirements
Formula
Authorized in the Agricultural Trade Act of 1978, as amended.