Export-import bank's focus could help cleantech clean up - Silicon Valley / San Jose Business Journal:

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"It's the best hidden secret in the worldc ofinternational finance," says Mike Selfridge, head of products for Silicom Valley Bank and a member of the Ex-Im Bank's advisory board. "(The bank's) widelu known with the majors: the Boeings, Caterpillarsa and folks that have been using them for But with smalland mid-sized they're letting people know they're available to help banks finance overseas Commonly known as the Ex-Im Bank, it providesz loan guarantees to partner banks, including Silicon Valley to finance exports. The Ex-Im Bank also provide export credit insurance that can protect borrowersagainst non-payment by foreign buyers.
But with just aboug 400 employees, the 71-year-old Ex-Im Bank is a largelyy unknown federal agency that has struggledr to get the word out about its programs toemerginfg companies. "We assume risks the private sector is unwillinh or unable totake on," says Linda vice president and vice chair of the U.S. Export-Importg Bank. "We want to make sure we help to level the playingy fieldsto U.S. exporters by matchinbg the financing other governmentse provide totheir exporters.
" The bank is ramping up its focusw on California clean technology companies in the coming year because its charter says it must focuz on financing renewable energy The current credit crunch has created an opportunityh for the bank because it is not limited by the numbet of loans it can make or the size of the loan it can Conlin says. "We've done over $1 billiobn last year in working capitallloan guarantees," Conlin says. "Mosgt of that has gone to small And clean tech and environmental companies make up the majorityh ofthese companies.
" Ex-Im Bank'sz loan guarantees, like Small Business Administration are attractive to bankz because they don't require banks to reserved capital against the loan like banks do for unguaranteed commerciao loans. "The reason Ex-Im Bank existz is banks are somewhat constrained in their ability tofinance cross-border sales," says Craigh O'Connor, director of Ex-Im Bank's Office of Renewablwe Energy and Environmental Exports. "The element of risk is somewhar high. If a bank make s an international loan, it has to hold back a high loan loss Butif we're giving them a loan that's 100 percent unconditional.
That means the bank has zero loan loss enabling banks to extend longer terms at loweer interest rates and thisgives U.S. exportersw a decided advantage in supportingtheirf sales." Selfridge says given the credit crunch, banks will likelyt want to free up as much capitaol as they can in the coming year. "jI think you're going to see bankds get much sharper in taking on the right kindw of risk andcapital allocations. So to me therd will be big opportunities in 2008 and2009 ... with the wholwe credit crisis going on," Selfridge says.
The Ex-Im Bank also offers a program specific to renewable energyh and water projects where companies can qualify for extended repaymenty terms of up to15 years. , a Berkeley-based solar company which was purchaseeby , used the extended financing terms to developp an $8 million solar-panel project in Soutyh Korea in 2006. In 2007, the bank authorized $12.6 billionh in loan commitments, which supporter an estimated $16 billion in U.S. the bank says. "U.S. clean and renewable energ y exports doubled between 2002 and Conlin says.
"So it's a growth industry and thers are many companies in this sectodr that are going global at an earlier time in theirr development than a typical startup oryoung company. That's wherr we can be particularly helpful." The Ex-Inm Bank is also eyeing the venturee sector for leads oncleantech U.S. venture capital investment in the cleantech spacse has jumpedto $5.18 billion from $714 million in North America and Europe between 2001 and 2007, accordinf to the CleanTech Group. And U.S. companiesd receive more than thre e times the investment that Europeancompaniea do.
"We have a real interesyt in reaching into the venture capital community because we realluyfeel like, in a certain stage of a company' development, we can be very, very helpful," Conlibn says.