Going Global SBA offers three different products for exporters and lenders.
By Barbara Caldwell
With 96 percent of the world’s population and 67 percent of the world’s purchasing power located outside the borders of the United States, international opportunities abound for U.S. small businesses. It is critical for American businesses to think globally because exporting is crucial to our nation’s economic health.
The Small Business Administration (SBA) offers three loan products for small business exporters and lenders: SBA ExportExpress, the Export Working Capital Loan and the International Trade Loan.
SBA ExportExpress The SBA ExportExpress combines lending assistance with technical assistance and allows for a variety of uses. It is the agency’s most flexible export financing program.
ExportExpress loans are available to assist small businesses in developing or expanding export markets. Proceeds may be used to finance export-development activities such as participation in a foreign trade show or translation of product literature; revolving lines of credit for export purposes; acquiring, constructing, renovating, improving or expanding facilities or equipment used in the U.S. to produce goods or services for export; financing standby letters of credit used as bid or performance bonds on foreign contracts; and transaction-specific financing for overseas orders.
The SBA guaranty is 85 percent for loans up to $150,000 and 75 percent for loans more than $150,000 up to a maximum loan amount of $250,000.
Export Working Capital Loan The Export Working Capital Loan gives lenders the comfort they need so small businesses can get financing.
Under this loan program, the SBA guarantees up to 90 percent of the loan amount up to $1 million. The program has low fees and flexible terms, offers exporters preliminary commitments that encourage lenders to provide credit and offers a simplified application form.
Proceeds may be used to purchase finished goods for export or acquire inventory to be exported, finance pre-export costs of labor and materials used in the manufacture of goods for export, finance costs of U.S. labor and overhead for service-company exports, finance standby letters of credit used for bid or performance bonds and finance foreign accounts receivable.
The International Trade Loan The International Trade Loan helps small businesses either engaged in international trade or adversely affected by competition from imports.
Under the International Trade Loan Program, the SBA can guaranty as much as $1.25 million in combined working capital and facilities and equipment loans. Proceeds may be used for purchasing land and buildings, building new facilities, renovating or expanding existing facilities, purchasing or reconditioning machinery, equipment and fixtures and making other improvements that will be used within the U.S. for producing goods or services.
Loan proceeds also may be used for a permanent working capital loan or as transaction-specific financing under the provisions of the Export Working Capital Loan. International Trade Loan proceeds may not be used for debt refinancing.
For the fixed-asset and permanent working capital portion of the International Trade Loan, the SBA can guarantee up to 85 percent of loans up to a maximum loan amount of $150,000, and up to 75 percent of loans above $150,000.
Under the International Trade Loan, the working capital portion of SBA’s guaranty is limited to $1 million, the guaranty for fixed assets is limited to $1 million, and the combined guaranties cannot exceed $1.25 million.
Barbara Caldwell is the Public Information Officer for the U.S. Small Business Administration (SBA), Kansas City, Mo. District Office. She can be reached at (816) 374-6760 or by e-mail at .
