US Government Finance Programs to Help Expand Your Export Sales

SBA Loan Guaranty Programs

Designed to Assist

American Small Business Exporters

SBA Loan Programs for Exporters

• Export Working Capital Program

• Export Express

• International Trade Loan

Export Working Capital Program

• 90% Guaranty• $5 million, maximum loan• $4.5 million is maximum

SBA guaranteed portion• Transaction financing • Single Project or Revolving

Line• Quick turnaround time

• Company meets SBA size standards– Based on NAICS or Alternate Size Standard– NAICS - Manufacturing: under 500 employees,

possibly more depending on NAICS (up to 1500)– Alternate: Less than $15 million Net Worth and

$5 million Net Profit (last 2 year average)– Ex-Im Bank has no restrictions for size

• In business 12 months or proven expertise No U.S. content requirement; Military sales, OK

• Other SBA eligibility provisions– Criminal history, previous loss to govt. etc.

Export Working Capital Program Eligibility

EWCP - Indirect Exports• Applicants who produce products or

services that enter into the export channel, but do not directly export their products are eligible for EWCP financing–Manufacturers using an Export Trading

Company– Suppliers to other domestic

manufacturers

• Requires certification from domestic customer that goods are in fact being exported.

EWCP Use of Proceeds

To Provide Working Capital to Perform on Export Orders or Contracts

To Finance Export Receivables and Inventory

To Support Standby Letters of Credit used as Bid Bonds or Performance Bonds

EWCP Loan Types

• Single Transaction Loan

• Transaction Based Line of Credit

• Asset Based Line of Credit

Transaction Based Line of Credit

• Advances are made against foreign P.O. or contract

• Supported by L/C or Credit Insurance

• Strong Buyers can be approved on uninsured, open account terms

Asset Based Line of Credit• Advances made against borrowing base

certificate and aging of foreign receivables & export inventory schedule

• Receivables usually must be supported by credit insurance

Note: Eximbank provides a 25% discount on its small business credit insurance policy to exporters having an SBA EWCP loan

Open Account, No Credit Insurance

No Insurance is required if:

• Receivables are from financially sound companies, multinationals or highly-rated governmental entities in countries with minimal political risk

EWCP - Collateral

• Self-liquidating loan

• First lien on all assets being financed

• Personal guarantees of all owners of 20% or more who are active in the business

• Other collateral on a case-by-case basis

EWCP Fees• One time guaranty fee of 1/4 of 1% of the

guaranteed portion for loans with a maturity of 12 months or less. Loans with a 13 – 36 month term have fees between 2% and 3.75%.

• 52 basis point on-going fee paid by lender• Business and lender negotiate Interest Rate

and fees; lender is required to disclose this information to SBA

International Trade Loan (ITL)

• Maximum loan amount of $5 million and maximum guaranty of $4.5 million (Lender gets a full 90% guaranty)

• Working capital has a sublimit maximum of $4 million• Eligibility requirements:

• The loan proceeds will significantly expand an existing export market or develop new export markets; or

• The applicant business has been adversely affected by import competition

AND• Upgrading facilities or equipment will improve the

applicant’s competitive position

International Trade Loans (ITL)

• Use of Proceeds :– Facilities– Equipment– Working Capital– Debt refinancing is allowed.

• Business plan/application must document eligibility requirements (i.e. export projections or evidence of adverse impact).

• ITL can be combined with a separate EWCP loan. Maximum working capital allowed is $4 million

International Trade Loans - How to Apply

• Apply directly with a commercial loan officer at your existing bank of account. Application must include projections that will demonstrate increased export sales as a result of the loan or adverse impact due to foreign competition and how competitive position will be improved

Export Express

• Loans and Lines of Credit up to $500,000. • Only Lenders that are approved by SBA for Export

Express Loans - ask your District Office for a list.• Approved banks make their own credit decision, use

their own forms and receive a 90% SBA guaranty up to $350,000 and 75% on loans over $350,000 to $500,000.

• Some out of State lenders loan nationally via the inernet

Export Express• The maximum loan amount under SBA Export Express is

$500,000. This maximum does not include other Express• Processed using the existing SBA Express processing

procedures• Eligibility:

– applicant in business for at least 12 months – or the applicant’s key personnel have demonstrated export expertise and successful business experience. If under 12 months, lender must use conventional underwriting – no credit scoring.

– proceeds are to be used to develop or expand their export markets

– Borrower provides estimate of exports for next 12 months.

Export Express• Proceeds may be used for any of the following:– transaction-specific financing of export deals,

including standby letters of credit– general lines of credit for export purposes– export development activities such as

brochure translation or participation in a trade mission

– term loans for permanent working capital, machinery and equipment, or real estate

• Proceeds may not be used to sell in a prohibited country or to finance offshore operations.

Financing Exports with SBA’s

Assistance

Rick Schulze, Regional Export Finance ManagerU.S. Small Business Administration

U.S. Export Assistance Center4300 Amon Carter Blvd., Suite 114

Fort Worth, Texas 76155817-684-5506

richard.schulze@sba.gov