PEFCO is a privately owned U.S. export-finance institution that lends and purchases eligible government-guaranteed export loans to supplement private funding.
The Private Export Funding Corporation (PEFCO) is a privately owned U.S. financial institution that helps fund eligible export loans, principally by lending directly or purchasing loans from other lenders when those loans carry qualifying U.S. government guarantees. PEFCO supplements commercial funding; it is not a federal agency, does not replace the foreign buyer’s repayment obligation, and does not buy loans directly from exporters.
Long-dated export loans can be difficult for a commercial bank to retain. A lender may have limited balance-sheet capacity, maturity appetite, or access to fixed-rate funding even when EXIM is prepared to guarantee the credit risk. PEFCO was created in 1970 to help fill that funding gap by mobilizing private capital for eligible U.S. exports.
PEFCO’s role is therefore narrower than the broad phrase “export finance.” It does not insure an exporter’s ordinary open-account receivable, approve the export sale on EXIM’s behalf, or function as a consumer deposit bank. Its core role is funding and liquidity for qualifying loans.
flowchart LR
E["U.S. exporter"] -->|"Goods or services"| B["Foreign buyer"]
O["Originating lender"] -->|"Creates eligible export loan"| B
P["PEFCO"] -->|"Direct funding or loan purchase"| O
X["EXIM"] -->|"Guarantee on eligible loan"| P
B -->|"Debt service"| P
The diagram is simplified. In a direct-loan structure, PEFCO may lend to the foreign buyer without an originating lender holding the loan. In a secondary purchase, the lender originates the transaction and PEFCO purchases eligible loan interests or disbursements under agreed documentation. Servicing, agency, and borrower-contact duties depend on the program and transaction documents.
EXIM and PEFCO also have agreements related to PEFCO’s funding. EXIM’s fiscal 2025 annual report describes guarantees on export loans PEFCO makes or purchases and on approved secured debt obligations used in the relationship. That support does not turn PEFCO into EXIM or make every PEFCO obligation a general federal guarantee.
PEFCO can provide a loan for an eligible foreign buyer to purchase U.S. goods or services. The transaction still requires underwriting, documentation, an EXIM guarantee, and compliance with the applicable program.
PEFCO can agree to buy an eligible export loan originated by another lender. The purchase gives the originating lender a funding outlet and can free balance-sheet capacity for additional transactions. PEFCO does not buy an exporter’s sales invoice directly; the asset is the qualifying loan created by a lender.
PEFCO’s 2025 annual report also describes secondary-market activity involving loans guaranteed by the U.S. International Development Finance Corporation and the U.S. Department of Agriculture. These programs have their own eligibility, guarantee, servicing, and reporting rules and should not be treated as EXIM export loans merely because PEFCO is a purchaser.
| Party | Primary role | What it does not automatically do |
|---|---|---|
| Exporter | Sells and performs the export contract | Provide long-term buyer funding unless supplier credit is agreed |
| Foreign buyer | Purchases goods or services and owes repayment | Transfer its debt obligation to EXIM merely because a guarantee exists |
| Commercial lender | Originates, funds, administers, or services the loan | Receive coverage without satisfying guarantee conditions |
| PEFCO | Provides direct funding or purchases eligible guaranteed loans | Set U.S. export policy or issue the EXIM guarantee |
| EXIM | Applies its mandate and issues eligible loans, insurance, or guarantees | Act as PEFCO’s private shareholder or perform the exporter’s contract |
This separation is important. Calling PEFCO “the U.S. export credit agency” is incorrect; EXIM holds that role. Calling PEFCO an ordinary commercial lender also misses its specialized relationship with government-guaranteed finance.
Assume a commercial bank arranges a $10 million loan to a foreign buyer purchasing eligible U.S. equipment. EXIM approves a guarantee for the eligible loan, and PEFCO agrees to purchase the qualifying loan disbursements from the bank.
The economic result is that the bank can originate the transaction without retaining the full $10 million loan for its entire life. PEFCO provides funding capacity, while EXIM’s guarantee addresses defined credit risk.
The structure is still conditional. An ineligible disbursement, missing export evidence, excluded local costs, sanctions issue, late claim, or failure to follow servicing duties may create exposure outside the guarantee. Fees, interest-rate risk, prepayment, documentation, and timing also affect the economics.
PEFCO was incorporated in 1970 with support from the U.S. Department of the Treasury and EXIM. EXIM’s historical timeline describes PEFCO as a consortium of private lenders for long-term export finance and a funding source for EXIM-backed transactions.
In September 2020, EXIM renewed its agreement with PEFCO for 25 years. More recent evidence confirms that the relationship continues: PEFCO published a 2025 annual report, EXIM’s fiscal 2025 financial statements reported its PEFCO relationship, and EXIM’s Board minutes for January 27, 2026 recorded approval of a PEFCO working-group transaction.
Those records establish current institutional activity, but they do not establish that every proposed export loan is eligible or available. Users should consult current program documents rather than infer terms from historical transactions.
PEFCO’s involvement should be analyzed as part of the complete financing chain, not as a standalone assurance that an export transaction is sound.
This page is educational and does not provide lending, legal, investment, or transaction-structuring advice.