Most U.S. banks don’t provide domestic loans for working capital advances on export orders, receivables, or letters of credit, which can put a damper on export sales.
So, who do you turn to if you need financing to help develop or expand your export operations? Enter the Small Business Administration (SBA) and its three loan programs for small business exporters:
- Export Express Program
- International Trade Loan Program
- Export Working Capital Program
These programs allow small businesses to borrow up to $5 million if they qualify. The company applying must have been in business for at least 12 months, though this requirement can be waived under certain circumstances.
Export Express Program
Financing: up to $500,000
Use of Proceeds: For business purposes that will enhance a company’s export development, such as participating in a trade show, supporting stand-by letters of credit, financing specific export orders, expanding production facilities, or purchasing equipment and inventory.
How to Apply: Ask your lender if they are an SBA Export Express lender. Borrowers use their lender’s own application forms and the SBA’s Borrower Information Form to apply. The SBA will approve or deny the loan in 36 hours or less. Click here to find Export Express lenders.
International Trade Loan Program
Financing: up to $5 million for fixed assets and working capital
Eligibility: For small businesses expanding existing or developing new export markets. Borrowers must be able to demonstrate that loan proceeds will improve the company’s competitive position.
Use of Proceeds: To acquire, construct, renovate, modernize, improve, or expand facilities in the U.S. to produce goods or services involved in international trade. Proceeds may also be used to refinance existing loans.
How to Apply: Ask your existing lender if they are an SBA-approved 7(a) lender, which means they are authorized to underwrite an International Trade Loan Program, or click here to find an authorized lender.
Export Working Capital Program Loan
Financing: up to $5 million
Use of Proceeds: For suppliers, inventory, or production of export goods and services; working capital to support foreign accounts receivable; and stand-by letters of credit. Companies can apply for this loan before finalizing an export sale or contract.
How to Apply: Ask your lender if they are approved to underwrite Export Working Capital Program loans or click here to find an approved lender.