SBA EXPORT LOAN PROGRAMS
Patrick Hayes, Regional Manager
SBA Export Solutions Group
U.S. Export Assistance Center
600 Superior Avenue, Suite 700
Cleveland, OH 44114 - 216-522-4731
patrick.hayes@sba.gov
National Export Initiative
• Double Exports in five years
• Expand U.S. government’s export promotion
efforts (Trade Promotion Coordination
Committee (TPCC) consisting of19 agencies
• Provide access to credit
• Eliminate barriers that prevent open and fair
access to foreign markets
Export.gov
• U.S. Government’s export portal
– market research
– trade events
– trade leads
– County Commercial Guides
– Much, much, much more……
www.export.gov
SBA Export Loan Products
• Export Working Capital Program (EWCP)
– Up to $5 Million; 90% guaranty for short term loans and lines of
credit for export purposes.
• Export Express
– Up to $500,000. Term loans and/or lines of credit for export
purposes – streamlined processing procedures.
• International Trade Loan
– Up to $5 Million: now with a 90% guaranty. Term loans for
facilities, equipment, and working capital that will enhance export
ability. Refinancing of existing debt is also available.
Export Working Capital Program
Eligibility
• Company meets SBA size standards
– Based on NAICS or Alternative Size Standard
– NAICS -Manufacturing: under 500 employees
o can be as high as 1,500 employees
– Alternative Size Standard: Net worth less than $15 million and net
profit less than $5 million (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 allowable
• Other SBA eligibility provisions
– Criminal history, previous loss to govt. etc
EWCP Use of Proceeds
Asset Based and Transaction Based
• Working Capital for production of export goods and
services
• Financing of existing export receivables and export
inventory
• Portions of the EWCP loan may be used to fund standby
Letters of Credit when required as:
 Bid Bonds
 Performance Bonds
 Advance Payment Guaranties
Two Types of EWCP Loans
EWCP
Transaction
Based
Asset-Based
Transaction Based EWCP
Self Liquidating Line of Credit
Export
Order
Pay Down
EWCP
Advance
EWCP
Invoice
Inventory
Payment
Finished
Goods
•
Transaction Based EWCPs can be utilized for single export orders or multiple orders on a
revolving basis. No funds are disbursed until there is an export order in place. Funds are used
by the borrower to produce goods for a specific export order. SBA requires secure payment
method from foreign buyer which will be directed to pay down the EWCP
Transaction Based EWCP
Use of Proceeds
• To acquire/produce goods or services for export. EWCP
funds can be used to finance up to 100% of exporter’s
direct cost associated with a specific export transaction,
not to exceed 90% of the overall export sale amount.
Example - Small business exporter lands a $1 Million export sale. The
production costs for the exported item is $700,000 – bank can
therefore advance the entire $700,000 under the EWCP program.
• To support Standby Letters of Credit used as performance
and bid bonds
Transaction Based 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.
Transaction Based EWCP
Payment methods
• Transaction evidenced by Purchase Order, L/C or signed
contract
• Acceptable payment by foreign buyer





Cash in Advance
Letter of Credit
Documentary Collections
Open Account (insured)
Open Account (no insurance)
Open Account - No Insurance
No Insurance is required if:
• Receivables are from financially sound corporations,
multinationals or highly-rated governmental entities in
countries with minimal political risk (or)
• Exporter can provide favorable Ledger Experience with
specific accounts over a significant period of time.
EWCP - Collateral
• Self-liquidating loan
• First lien on all assets being financed
– Typically inventory, WIP and A/R
• Personal guarantees of all owners of 20% or more.
• Other collateral on a case-by-case basis
Two Types of EWCP Loans
EWCP
Transaction
Based
Asset-Based
Asset Based EWCP – Use of Proceeds
• To finance existing foreign accounts receivables. Advance
rates up to 90%. Note: normally export credit insurance is
required (foreign accounts receivable insurance)
• To finance existing foreign inventory. Advance rates up to
75%
• To support Standby Letters of Credit used as performance
or bid bonds.
Asset Based EWCP
MAXIMIZING THE BORROWING BASE
ASSET-BASED FACILITY
SBA EWCP GUARANTEE
Amount
% Advance
Collateral
% Advance
Collateral
Raw Materials
$200,000
40
$80,000
75
$150,000
Work-In-Progress
200,000
0
0
75
150,000
Finished Goods
600,000
50
300,000
75
450,000
Exportable Inventory
Subtotal
$1,000,000
$380,000
$750,000
Foreign Accounts Receivable
Open Account
$400,000
0
$0
90
$360,000
L/C Backed A/R
600,000
70
420,000
90
540,000
Subtotal
Total Borrowing Base
1,000,000
420,000
900,000
$2,000,000
$800,000
$1,650,000
EWCP Fees
• One time guaranty fee of ¼ of 1% of the guaranteed
portion for loans with a 12 month or less maturity. This fee
is reduced by half for veteran owned businesses.
• Deals initially booked for 12 months or less can be “reissued” for ¼ of 1% the following year
• 51.9 basis point on-going fee paid by lender
• Business and lender negotiate Interest rate and fees (there
is no restriction on the fees), lender is required to disclose
this information to SBA
EWCP Loans - How to Apply
• EWCP loans are submitted to the local Lender who
submits them to the SBA.
• The application is the 84-1, a joint application used by
SBA and Ex-Im Bank
Export Express
• Loans and Lines of Credit up to $500,000.
• 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.
Export Express
• The maximum loan amount under SBA Export Express is
$500,000.
• Processed using the existing SBAExpress processing
procedures
• Eligibility:
– applicant in business for at least 12 months
– proceeds are to be used to develop or expand their export (direct
and indirect) markets
– Borrower can provide estimate of exports for next 12 months.
Export Express
• Proceeds may be used for any of the following purposes:
– 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
SBA Export Express Fees
Gross loan Amount
$150,000 or less
$150,001 - $500,000
12 months or less
More than 12 months
0.25% of guaranteed portion*
2% of guaranteed portion*
0.25% of guaranteed portion** 3% of guaranteed portion**
• *This fee is waived on loans under $150,000 if approved
before September 30, 2015
• **This fee is reduced by 50% for veteran owned businesses.
• Export Express loan recipients also receive a 25% discount
on their Ex-Im Bank Small Business/Express Credit
Insurance premiums.
Export Express
How to Apply
• Apply at any bank with SBA Export Express Authority.
• Export Express Loans are processed in the same way that
SBA Express Loans are processed.
International Trade Loan (ITL)
• The maximum loan is $5 million with a maximum SBA
guarantee portion of $4.5 million. Lender gets a 90%
guaranty.
 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 (ITL)
How to Apply
• Apply directly at your bank for International Trade Loans.
Your bank can process through Preferred Lender
processing or through normal 7(a) processing.
Getting Started – New To Export
SBA’s Export Business Planner
•
•
•
•
•
A free downloadable tool to save and customize
How to determine your export readiness
Worksheets for global market research
Financing information and options
Customizable export and marketing plan
templates
www.sba.gov/exportbusinessplanner
Thank You!
Patrick Hayes, Regional Manager
SBA Export Solutions Group
U.S. Export Assistance Center
600 Superior Avenue, Suite 700
Cleveland, OH 44114 - 216-522-4731
patrick.hayes@sba.gov