Export Financing
In Alabama, the SBA Export Express program provides exporters and lenders a streamlined method to obtain SBA backed financing for loans and lines of credit up to $250,000. Lenders use their own credit decision process and loan documentation; exporters get access to their funds faster. The SBA provides an expedited eligibility review and provides a response in less than 24 hours.
Key Benefits
SBA Export Express helps small businesses develop or expand their export markets. Loan proceeds may be used to finance any export development activity, including:
- Standby Letters of Credit when required as a bid bond, performance bond or advance payment guarantee
- Participation in a foreign trade show
- Translation of product brochures or catalogues for use in overseas markets
- General lines of credit for export purposes
- Service contracts from buyers located outside the United States
- Transaction-specific financing needs associated with completing actual export orders
- Purchase of real estate and equipment to be used in the production of goods or services for export
- Provide term loans and other financing to enable small business concerns, including export trading companies and export management companies, to develop foreign markets
- Acquire, construct, renovate, modernize, improve or expand productive facilities or equipment to be used in the United States in the production of goods or services for export
How to Apply
Interested businesses should contact their existing lender to determine if they are an SBA Express lender. AITC can provide a list of approved banks. Lenders that participate in SBA’s Express program are also able to make Export Express Loans. Application is made directly to the lender. The lenders use their own application material in addition to SBA’s Borrower Information Form. Lenders approve the request and then submit a limited amount of eligibility information to SBA’s National Loan Processing Center. The SBA provides a response within 24 hours.
SBA’s Role in Export Express Financing
The SBA has placed a priority on helping small business exporters. 70% of all U.S. exporters have 20 or fewer employees. Most banks in the U.S. do not lend against export orders, export receivables or letters of credit. SBA provides lenders with up to an 85% guaranty on export loans as a credit enhancement, so that participating banks will make export loans that make the necessary export financing available.
Eligible Businesses
SBA Export Express loans are available to businesses that meet the normal requirements for an SBA business loan guaranty. Financing is available for manufacturers, wholesalers, export trading companies and service exporters. Loan applicants must demonstrate that the loan proceeds will enable them to enter a new export market or expand an existing export market. Applicants must have been in business, though not necessarily in exporting, for at least 12 months.
Loan Amount
The maximum Export Express line of credit/loan amount is $250,000. Participating banks receive an 85% SBA guaranty on loan amounts up to $150,000 and 75% on loan amounts between $150,000 – $250,000.
Interest Rate
The SBA does not establish or subsidize interest rates on loans. Interest rates are negotiated between the borrower and the lender, but may never exceed SBA interest rate caps. Rates can either be fixed or variable, and are tied to the prime rate as published in The Wall Street Journal.
Collateral
Lenders follow collateral policies and procedures that the lender has established for its non-SBA guaranteed loans.
Loan Maturity and SBA Fee
The maturity of an SBA Export Express term loan is usually five to 10 years for working capital, 10 to 15 years for machinery and equipment (not to exceed the useful life of the equipment), and up to 25 years for real estate. The maturity for revolving lines of credit may not exceed seven years. The SBA fee for an Export Express with a 12-month maturity or less is ¼% (0.25%) assessed on the guaranteed portion of the loan. For loan maturities longer than 12 months, the guaranty fee is 2% on loans up to $150,000 and 3% on loans between $150,000 and $250,000.
Technical Assistance
Because many small business exporters face unique problems and challenges, the SBA Export Express Program also includes technical assistance in the form of marketing, management and planning assistance.
The Alabama International Trade Center, part of the Alabama Small Business Development Center Network, is an SBA resource partner that provides technical assistance on the Export Express and other SBA financing products.
Lender Training is available
The SBA Senior International Credit Officers will routinely provide interested lenders with the necessary training to become proficient on the Export Express program. They will work individually with bank staff on questions during the application process.
Contact us
The Alabama International Trade Center staff can help in weighing financing options and risk mitigation, plus advise on SBA loan products and application procedures. Contact us to learn more about the benefits of the Export Working Capital Program (EWCP) and whether your business might qualify for EWCP financing.