SBA Export Express combines the SBA’s small business lending assistance with its technical assistance programs to help small businesses that have traditionally had difficulty in obtaining adequate export financing. The pilot program is available throughout the country and is expected to run through September 30, 2005.
SBA Export Express helps small businesses that have exporting potential, but need funds to buy or produce goods, and/or to provide services, for export.
Loan proceeds may be used to finance export development activities such as:
* Participation in a foreign trade show;
* Translation of product brochures or catalogues for use in overseas markets;
* General lines of credit for export purposes;
* Service contracts from buyers located outside the United States;
* Transaction-specific financing needs associated with completing actual export orders; and/or
* Purchase of real estate and equipment to be used in production of goods or services which will be expansion.
* Provide term loans and other financing to enable small business concerns, including export trading companies and export management companies, to develop foreign markets;
* Acquire, construct, renovate, modernize, improve or expand productive facilities or equipment to be used in the United States in the production of goods or services involved in international trade.
Who Can Use this Program?
SBA Export Express loans are available to persons who meet the normal requirements for an SBA business loan guaranty. Loan applicants must also demonstrate that the loan proceeds will enable them to enter a new export market or expand an existing export market, and- have been in business operation, though not necessarily in exporting, for at least 12 months.
How Does the Program Work?
Any lender that is authorized to participate in the SBA Express loan program may participate in SBA Export Express. SBA Export Express lenders use streamlined and expedited loan review and approval procedures to process SBA guaranteed loans. The lender uses its own loan analyses, loan procedures and loan documentation. Completed loan applications are submitted for approval to the SBA’s processing center in Sacramento, California. The SBA provides the lender with a response, typically within 36 hours.
What is the SBA Guaranty
The SBA guaranty encourages lenders to make loans to small business exporters that they might not make on their own. The SBA’s Export Express guaranty is 85 percent for loans up to $150,000 and 75 percent for loans more than $150,000 up to a maximum loan amount of $250,000. The maximum loan amount under Export Express is $250,000.
Terms, Interest Rates and Fees
Interest rates are negotiated between the borrower and the lender. Rates can either be fixed or variable, and are tied to the prime rate as published in The Wall Street Journal. Lenders may charge up to 6.5 percent over prime rate for loans of $50,000 or less and up to 4.5 percent over the prime rate for loans over $50,000.
Like most 7(a) loans, the maturity of an SBA Export Express term loan is usually five to 10 years for working capital, 10 to 15 years for machinery and equipment (not to exceed the useful life of the equipment), and up to 25 years for real estate. The maturity for revolving lines of credit may not exceed five years.
The guaranty and servicing fees under SBA Export Express are the same as for regular SBA 7(a) guaranty loans. (Link to Fees)
Technical Assistance
Because many small business exporters face unique problems and challenges, the SBA Export Express Program also includes technical assistance in the form of marketing, management and planning assistance.
Technical assistance is provided by SBA’s U.S. Export Assistance Centers, in cooperation with SBA’s network of resource partners, including the Small Business Development Centers (SBDCs) and Service Corps of Retired Executives (SCORE).
On approval of an SBA Export Express loan, a U.S. Export Assistance Center representative will contact the borrower to offer appropriate assistance. This assistance may include training offered through the SBA’s Export Trade Assistance Partnership, SBDC International Trade Center, SCORE, District Export Council, or Export Legal Assistance Network.
What About My Other Financing Needs?
The SBA offers a range of long- and short-term financing options for small business exporters including the Export Working Capital Program (EWCP) and the International Trade loans. Information on both of these loans can be foundby selecting the link in the left hand column.
For more information about SBA Export Express or other SBA export assistance programs, please contact the SBA representative in the U.S. Export Assistance Center nearest you.
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