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Export Working Capital Program by alicejenny


									  Small Business Administration
Export Finance Guaranty Programs
         Office of International Trade
      U.S. Small Business Administration

             ASBDC Conference
               San Diego CA
                August 2011
Martin Selander
International Trade Specialist
U. S. Small Business Administration
U. S. Export Assistance Center
2303 Martin Court #315
Irvine CA 92612

(949) 660-8935

Serving exporters of Southern California,
Nevada, and Hawaii
Additional information available on

  Including copies of all required
application forms, program info and
       national staff directory
            The SBA Office of International Trade is in your backyard

              Office of International Trade Footprint

                                                 SBA District Offices (68)
                                                 U.S. Export Assistance Centers (19)

 Region 1
 Region 2
 Region 3
 Region 4
 Region 5
 Region 6
 Region 7
 Region 8
 Region 9
Region 10
      SBA Loan Programs for Exporters

• Export Working Capital Program (EWCP)

• Export Express

• International Trade Loan (ITL)
Export Working Capital Program

         • 90% Guarantee to the bank

         • $5 million maximum loan

         • $4.5 million maximum SBA
           guaranteed portion
Export Working Capital Program

          • Transaction financing

          • No minimum financial ratios
            to qualify

          • Single Contract or Revolving

          • Quick turnaround time
           EWCP Use of Proceeds

• Loan is used to acquire or produce goods or services
  for export and/or to finance the accounts receivable of
  foreign sales.

• Pre-shipment Guarantee
   – 100% of labor, material, inventory, shipping and
     overhead costs

• Post-shipment Guarantee
   – Foreign Accounts Receivable financing
Export Working Capital Program

      Transaction Based
      Assignment of payment proceeds from
      foreign buyer:
         -Letter of Credit
          -Open Account
         EWCP - Indirect Exports

• Applicants who produce products or services
  that will be exported, but who do not directly
  export their products, are eligible for EWCP
   – Manufacturers using an Export Trading
   – Suppliers to other domestic manufacturers
     who will export their final product

• Requires certification from domestic customer
  that goods are being exported.
        EWCP - Advance Rates

• Pre-shipment - limited to exporter’s cost of
  the product being exported (materials, labor
  and overhead) or the cost of purchasing a
  product for resale.

• Post-shipment – Up to 85% on Receivables
  (no more than 60 days past due) and 90%
  on usance letters of credit.
             EWCP - Collateral

• Assignment of contract proceeds

• First lien on all assets being financed

• Personal guarantees of all owners of 20% or more who
  are active in the business (as with all SBA guarantees).

• Other collateral as required by the bank on a case-by-
  case basis
          Asset Based EWCP

• For asset based revolving loans, the Borrower must
  submit a borrowing base certificate in a format acceptable
  to the lender on a monthly basis and with each

• Advances are made against said borrowing base of
  eligible export accounts receivables/inventory.

      Advance Rates:
•     Inventory                         50%
•     Insured Accounts Receivable       90%
Interest Rates & Fees
   Negotiable between applicant and lender

   SBA fee is one quarter of 1.00% of the SBA guaranteed
   portion for 12 months or less


   $100,000 loan
   x 90% SBA guaranty

   =$90,000 SBA guaranteed portion

   =$225.00 fee due from borrower
Export Working Capital Program

      Eligibility & Features
  Exporter must demonstrate ability to perform / i.e. in
 business 12 months (Note other “non-export” SBA loans
 are available from SBA District Office)

 Minimal   collateral

 Service   & Trading companies are eligible

 Country   limitation schedule

 Credit   Insurance

 Applications   processed at SBA USEAC
            SBA Export Express

 Provides financing to small
  businesses whose borrowing
  needs are too small to be
  profitably met by traditional SBA

 “Small” = maximum loan
  $500,000 (no minimum)

 Flexible use of proceeds
              SBA Export Express
 No SBA application forms

 No SBA underwriting or credit
  review (eligibility review only)

 “Application” faxed or emailed by
  bank to SBA national processing
  center in Sacramento

 SBA turnaround 24-48 hours
         Export Express

• Eligibility:
  – Applicant must have been in
     business for at least 12 months

  – Proceeds are to be used to develop
    or expand their export markets
          Export Express Use of Proceeds

Proceeds may be used for any of the following purposes:

   – Transaction-specific financing of export sales

   – General lines of credit for export purposes

   – Export marketing activities such as brochure
     translation or participation in a trade mission

   – Term loans for permanent working capital,
     machinery and equipment, or real estate
       International Trade Loan (ITL)

• Term loan - maximum amount of $5 million

• Maximum SBA guaranty of 90% ($4.5 million)
                 ITL Eligibility

1. Loan proceeds will be used to expand an existing
   export market or develop new export markets; or

2. The applicant business has been adversely affected
   by import competition
   Upgrading facilities or equipment will improve the
   applicant’s competitive position.

• Application/business plan must document eligibility;
  i.e: export projections or evidence of adverse impact.
          ITL Use of Proceeds

• Acquisition or improvement of production
  facilities or equipment to be used in the
  United States in the production of goods
  and services involved in international trade.

• Permanent Working Capital

• Debt refinancing in certain cases

Free resources that provide a comprehensive
guide to exporting.
                  Investment Financing—
                  Overseas Private Investment Corporation
Active in 150 developing countries

Investment Financing
Loans & Loan Guarantees:

•    typically up to 50% of project; minimum 25%
     U.S. equity

•    direct loans from $100k to $10 million for SMEs
     through the Small Business Center:

•    Loan guarantees up to $250 million
                   Investment Financing—
                   Overseas Private Investment Corporation

Political Risk Insurance

--Currency inconvertibility,
--Political violence, war, riot, revolution

Investment Missions
--OPIC InfoLine: (202) 336- 8799;
Martin Selander
International Trade Specialist
U. S. Small Business Administration
U. S. Export Assistance Center
2303 Martin Court #315
Irvine CA 92612

(949) 660-8935

Serving exporters of Southern California,
Nevada, and Hawaii

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