A California-based bank serving companies in the technology, life sciences, winemaking and private equity markets has won the 2005 Small Business Bank of the Year Award from the Export-Import Bank of the United States (US Ex-Im Bank).

The award from the US' official export credit agency recognises Silicon Valley Bank's use of Ex-Im Bank's guaranteed working capital loans and its letter of credit (L/C) insurance policy.

Key priorities

Ex-Im Bank Chairman Philip Merrill said Silicon Valley Bank had won the award because of its "innovative and unique approach to backing small high-technology company exports". Small businesses and technology exports are two of Ex-Im Bank's key priorities.

Silicon Valley Bank, headquartered in Santa Clara, utilised nearly US$100 million of Ex-Im Bank facilities to provide financing for export transactions that supported over 1,500 US small business jobs in fiscal year 2004.

L/C insurance growth

In that period, Silicon Valley Bank provided 35 Ex-Im Bank-guaranteed working capital facilities totalling US$77.5 million, and an additional US$20 million using its Ex-Im Bank L/C insurance policy.

This year the bank's utilisation of the L/C insurance facility looks set to grow bigger still. So far Silicon Valley Bank has provided 11 Ex-Im Bank-guaranteed working capital loans totalling US$22 million, and an additional US$20 million using the L/C insurance policy.

Policy conditions

The Ex-Im Bank L/C policy aims to reduce a bank's risks on confirmations and negotiations of irrevocable L/Cs issued by overseas financial institutions for the financing of US exports.

The policy applies to irrevocable L/Cs that conform to UCP 500 where the insured has a relationship with the foreign issuing bank. The policy is not applicable to revocable, back-to-back, red clause or conditional L/Cs.

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