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U.S. SBA EXPORT LOAN PROGRAMS
Robert L. Elsas, Regional ManagerSBA Export Solutions Group
U.S. Export Assistance Center601 Walnut Street Suite 580W
Philadelphia, PA [email protected]
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Small Business Jobs Act of 2010
• Signed into law on Sept. 27, 2010
• New legislation helps exporters by providing higher loan limits
• Export-related loans to small businesses approved under the Jobs Act provisions have reached nearly
$110 million as of Dec. 31, 2010
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U.S. SBA Export Loan Products
• Export Working Capital Program– Up to $5 Million; 90% guaranty for short-term loans
and lines of credit for export purposes – with lender coverage of up to $4,500,000.
• Export Express– Up to $500,000. Short-term loans and lines of credit –
far better than the 50% guaranty for normal Express Loans – processed through normal Express procedures but now with 90% and 75% guaranty’s
• International Trade Loan– Up to $5 Million: now with a 90% guaranty. Term loan
facilities, used for: capital equipment, permanent working capital and now the ability to consolidate and refinance existing debt to lower rates.
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Export Express
• Loans and Lines of Credit up to $500,000.
• All Express Lenders are authorized to process Export Express.
• 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 , far better than the normal 50% Express loan guaranty.
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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 markets– Borrower can provide estimate of exports for next 12
months.
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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
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Export Working Capital Program
• 90% Guarantee, low fees (1/4 of 1%) and flexible terms
• $5 Million is maximum loan • SBA guaranteed portion to Lenders is $4.500
Million• Asset based or transaction based financing• No pre-determined minimum ratios • Single Project or Revolver• Quick turnaround time • PLP Processing Available
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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 or Standby Letters of Credit Advance Payment Guaranty’s
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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.
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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
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International Trade Loan (ITL)
• Jobs Act changes: The maximum loan is $5 million with a maximum SBA guarantee portion of $4.5 million. Lender gets a 90% guaranty – Look at these Benefits to the Borrower:
- The applicant business has been adversely affected by import competition (Who Can Not Claim This?)
- The loan proceeds will significantly expand an existing export market or develop new export markets; or
- Upgrading facilities or equipment will improve the applicant’s competitive position
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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
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Thank You!
Robert L. Elsas, Regional ManagerSBA Export Solutions Group
U.S. Export Assistance Center601 Walnut Street, Suite 580W
Philadelphia, PA 19106 [email protected]