The Defense Security Cooperation Agency (DSCA) issued policy for a new term of sale called, “Credit Assured Payment Schedules” (CAPS). CAPS makes the United States a more competitive partner by providing an alternative to the standard “Cash Upon Acceptance” term of sale, which requires full payment upfront. The new CAPS term of sale is intended for partners who do not qualify for payment schedules under previous policy. The new CAPS term of sale is one improvement, under a broad initiative, to better serve our international partners through competitive and innovative financing.

Under CAPS, Foreign Military Sales (FMS) partners can secure a payment schedule through the backing of a Standby Letter of Credit (SBLC) from an eligible bank, and a 25% initial deposit. The SBLC serves to mitigate financial risk to the U.S. Government and can be leveraged in the event the partner fails to make payments on their FMS case(s).

DSCA is compiling a database of eligible banks that are interested in participating in CAPS. The database will be provided to partner nations looking to secure an SBLC. Eligible banks are either a U.S. bank with a minimum “A” credit rating, or a foreign bank located in the U.S. with a license from the Office of the Comptroller of the Currency that also has a minimum “A” credit rating. Final determination of CAPS eligibility is at the discretion of DSCA Financial Policy (FP).