Money man. (Trade Talk).

Small importers in Latin America often lack the cash to pay US. exporters for goods upfront, forcing them to arrange credit for 30, 90 or 120 days. This is especially true during hard economic times. That's why as the recession kicked in last year, Miami trade-finance agency Hemisphere National Bank of Florida launched ImportCard Financial. ImportCard, a Web-based service backed by the Export-Import Bank, offers up to US$500,000 in credit for as long as 90 days to importers that buy US.-made goods shipped from US. ports. ImportCard President Carlos Milian talks to LATIN TRADE contributor Derek Reveron about the process.

Why did you start ImportCard?

U.S. exporters are reluctant to give credit to importers they don't know, and they want to be paid in advance or within 30 days. That's not enough time for small importers who lack the U.S. dollars to pay. And few lenders specialize in small-trade financing transactions for Latin American countries, especially on the Web. We take applications only online at www.importcard.com. The Web site gives an automatic response.

Where are most of your clients?

Costa Rica, the Dominican Republic, Mexico, Nicaragua and Guatemala, in that order. They're not going through the same turmoil as Argentina and Venezuela.

You didn't mention Brazil.

Brazil has its own means of providing financing, and we can't play an important role for accounts of more than $300,000. We can compete for smaller accounts.

Do you have any importers in Brazil?

We have only two customers there presently. We are looking for a partner there, a trade finance company, to help funnel business to ImportCard. But we haven't done much traveling or marketing in Brazil because of the logistics.

What kind of marketing do you do in the rest of Latin America?

We've done extensive advertising in local newspapers in Guatemala, El Salvador, the Dominican Republic and Costa Rica. We've done a little in Nicaragua. We also promote at international trade shows, mostly in the U.S.

Who are your competitors?

We don't have many. Our main competitors are U.S. exporters who say they provide financing for free or at low cost to their customers.

How much credit have you extended so far?

We started in April 2001. As of the end of April 2002, we had loaned about $3 million. The average loan was about $45,000.

What are the rates and terms?

Interest rates vary from 12% to 14%, depending on the country where the importer does business and the amount of products purchased. We've gone down to 10.5% on some accounts above $250,000. There's a 2% fee to help cover Ex-Im insurance.

Are importers willing to pay the fee?

The 2% is always a concern because profit margins are so tight. We allow the U.S. seller or the Latin importer to pay the fees. The importers sometimes pass on the fees to their customers in Latin America.

Do you get more inquiries from Latin importers or from U.S. exporters?

Both sides. A guy in Georgia selling rice might get contacted by an importer in Guatemala he doesn't know. He refers the importer to us. Or a Latin American importer contacts us because he needs credit for more than 30 days.

What's the outlook for trade lending as interest rates head higher?

Everything is tied to the prime rate, so our charges will go up with interest rates. But we don't see that happening until the end of this year.