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Find Financing Here to do Business There: Export Loans for Small Business

As technology continues to break down barriers in communication and transportation, many small and mid-size American businesses are finding it easier to market and sell their products on an international stage. Roughly 70 percent of all U.S. exporters employ 20 or fewer people, according to the Small Business Administration.

For small business owners and those starting a business, finding the capital to launch marketing initiatives and export their products can be a daunting task. SBA provides a few financing options to help entrepreneurs develop and expand their international export business, as well as grants and funding opportunities to spur technological innovations that will help America lead the world into the new millennium.

Export Express Program

The SBA’s Export Express Program offers fast loans for small businesses to get them up and moving in the global marketplace. The loans are easy to apply for, and qualification requirements are less stringent than for other similar loans. Any business that has been in operation for at least one year and can show that the loans will help improve their export operations is eligible.

Businesses can apply for funding up to $500,000. These loans can either take the form of a term loan, or a revolving line of credit, and could be put toward a variety of business-expanding opportunities.

Business owners who wish to take advantage of Export Express funding can typically go through their existing lender. This particular program allows private lenders to use their own application forms alongside the SBA’s Borrow Information Form to apply for the loans.

Export Working Capital Program

Export working capital financing can be used to purchase raw materials, goods, labor and other supplies or equipment necessary to support export sales, according to a recent Trade Finance Guide from the U.S. Commerce Department. Unfortunately, many banks do not provide working capital advances on export orders, sometimes leaving small export businesses in a bind when it comes to funding.
Through SBA’s EWC program, businesses can qualify for up to a 90 percent guarantee on export loans of $5 million or less. The funding can be negotiated before export sales have been completed, allowing small businesses to better negotiate payment terms, according to the SBA.

Some of the key features of the EWC program include:

  • Ability to support one export or multiple exports
  • Funding for production of goods
  • Increased competitiveness through better sales term negotiation
  • Accelerated processing
  • Preservation of domestic capital to ensure continued U.S. sales

Unlike the Export Express Program, applicants will not be able to seek EWC funding from their regular money lender. U.S. Export Assistance Centers are located across the country in most major cities. Professionals from the SBA, the U.S. Department of Commerce, the U.S. Export-Import Bank, and other public and private organizations are on hand to answer questions.

International Trade Loan Program

Owners seeking fixed asset and working capital small business funding for their export enterprises can take advantage of the International Trade Loan Program. While the loans are primarily used by businesses to start or expand international trade operations, they are also available to those companies that have been adversely affected by international trade. If a small business can show it has been hurt by certain trade practices, it can apply for the loan to improve its competitive edge in the global marketplace.

According to the SBA, funds may be used for the following purposes for long-term fixed assets:

  • Acquisition
  • Construction
  • Renovation
  • Modernization
  • Improvement
  • Expansion

Information about the International Trade Loan Program is available through U.S. Export Assistance Centers, but applicants should go through their existing lender to determine eligibility.

Small Business Innovation Research

For companies that are looking to pioneer and export the latest technological advances, but are perhaps too small to attract venture capital investment, Small Business Innovation Research grants or Small Business Technology Transfer Program funding might be the best route. The SBIR program is highly competitive, and encourages small, privately held businesses to engage in federal research and development that might have the potential for commercialization, whether at home or in international markets. According to the SBIR website, the goals of the program are to:

  • Meet the needs of federal research projects
  • Advance innovations in technology
  • Stimulate the private sector by commercializing federal research and development projects
  • Provide opportunities for economically disadvantaged individuals to participate in innovation and entrepreneurship

From SBIR’s inception in 1982 through the end of 2009 – the last year for which data is available – the program has made over 112,500 awards totaling roughly $26.9 billion.

One Response to “Find Financing Here to do Business There: Export Loans for Small Business”

  1. Sam Pearson says:

    Ours is a generation of entrepreneurs. Leasing and financing options recently became more available and appealing to small business owners. The once common route of financing your new venture through community bank support is now an uneasy landscape of mega-banks who are making extension of capital support nearly impossible.

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