One of the biggest fears of an exporter is the fear of not getting paid. As with anything we do in business, we aim to mitigate risk, and payment risk can be managed. But that’s not all. Got a big international order? There are SBA export working capital loans to cover your materials, labor, shipping and more! Does your overseas buyer need credit or wish to buy on open account rather than cash up front? There are excellent programs from ExIm Bank to extend these services.
The SBA offers fast and easy Export Express expansion loans for small exporters
Small business exporters are taking advantage of the world market and selling billions of dollars of goods and services overseas every year. In fact, 70% of all exporters have fewer than 20 employees. If you are one of these businesses, or would like to join in this growing trend, and you think you are too small to receive government sponsored export financing, think again!
Streamlined financing up to $500,000
SBA Export Express offers flexibility and ease of use to both borrowers and lenders. It is the simplest export loan product offered by the SBA and allows participating lenders to use their own forms, procedures and analyses. The SBA provides an answer in 36 hours or less.
To learn more: https://www.sba.gov/offices/headquarters/oit/resources/5715
SBA Export Working Capital Program
The Export Working Capital (EWCP) loan provides advances for up to $5 million to fund export transactions from purchase order to collections. This loan has a low guaranty fee and quick processing time.
Application Process
Contact your local lender to see if they are approved to underwrite EWCP loans. You can apply for EWCP loans before finalizing an export sale or contract.
Use of Proceeds
- Financing for suppliers, inventory, WIP, or production of export goods or services
- Working capital to support foreign accounts receivable during long payment cycles
- Financing for stand-by letters of credit used as bid or performance bonds or as down payment guarantees
Contact your local U.S. Export Assistance Center to learn more about the Export Working Capital Program and whether your business qualifies.
EXIM Bank International Trade services:
For many U.S. exporters, a lack of financing can stand in the way of global growth. EXIM has several forms of support that can provide a solution:
- Working Capital Loan Guarantee
EXIM can work with your private lender to help secure financing for international sales. A lender receives a loan “guarantee” from EXIM, guaranteeing repayment for a percentage of the loan if the borrower ((i.e., U.S. exporter) defaults. You can use the loan from your bank to pay for the labor, materials, and other inputs required to fulfill sales. EXIM doesn’t replace your private bank; it simply backs their loan and increases your borrowing power. - Export Credit Insurance
An insurance policy for your foreign accounts receivable provides protection against the risk of buyer nonpayment. When EXIM backs your foreign receivables, private lenders are often willing to lend against assets otherwise excluded from the borrowing base. The bottom line for your business: same collateral, a larger borrowing base, and a better cash flow.
Foreign buyer credit from EXIM Bank
U.S. exporters of capital equipment and services face a special set of challenges when attempting to win international sales. Foreign buyers who require extended-term financing may face prohibitively expensive borrowing rates in their home country, blocking them from buying U.S. products and services.
EXIM’s loan guarantees support U.S. exporters in securing competitive financing for their creditworthy international buyers. By providing a loan guarantee to an American.-based commercial lender, EXIM can unlock financing otherwise unavailable to a foreign buyer seeking to purchase U.S. products and services.
Medium and long-term loan guarantees are suitable for large scale projects involving the export of high-value capital equipment or services.
For more info, see: https://www.exim.gov/what-we-do/finance-a-foreign-buyer-purchase
In short, there is an array of financial services available to U.S. exporters. The Kansas SBDC is here to guide you through this process. Want to get started? Please complete our short client intake form and an export advisor will contact you.