Export Working Capital
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Export Working Capital
The SBA's Export Working Capital Program (EWCP) supports export financing to small businesses when that financing is not otherwise available on reasonable terms. The program encourages lenders to offer export working capital loans by guaranteeing repayment of up to $1.5 million or 90 percent of a loan amount, whichever is less. A loan can support a single transaction or multiple sales on a revolving basis.
Designed to provide short-term working capital to exporters, the EWCP is a combined effort of the SBA and the Export-Import Bank. The two agencies have joined their working capital programs to offer a unified approach to the government's support of export financing. The EWCP uses a one-page application form and streamlined documentation with turnaround usually 10 days or less. A letter of prequalification is also available from the SBA.
Maximum 7(a) Loan Amounts
Export Working Capital Program Eligibility (EWCP)
In addition to the eligibility standards listed below, an applicant must be in business for a full year (not necessarily in exporting) at the time of application. SBA may waive this requirement if the applicant has sufficient export trade experience. Export management companies or export-trading companies my use this program; however, title must be taken in the goods being exported to be eligible.
Most small businesses are eligible for SBA loans; some types of businesses are ineligible and a case-by-case determination must be made by the Agency. Eligibility is generally determined Business Type, Use of Proceeds, Size of Business, and Availability of Funds from other sources. The following links provide more detailed information about each of these areas.
Type Of Businesses Eligible
Use Of Loan Pproceeds
Size
Availability
The proceeds of an EWCP loan must be used to finance the working capital needs associated with a single or multiple transactions of the exporter.
Proceeds may not be used to finance professional export marketing advice or services, foreign business travel, participating in trade shows or U.S.support staff in overseas, except to the extent it relates directly to the transaction being financed. In addition, "proceeds may not be used" to make payments to owners, to pay delinquent withholding taxes, or to pay existing debt.
The applicant must establish that the loan will significantly expand or develop an export market, is currently adversely affected by import competition, will upgrade equipment or facilities to improve competitive position, or must be able to provide a business plan that reasonably projects export sales sufficient to cover the loan.
Export Working Capital Program (EWCP) Maturities
SBA guarantees the short-term working capital loans made by participating Lenders to exporters. An export loan can be for a single or multiple transactions. If the loan is for a single transaction, the maturity should correspond to the length of the transaction cycle with a maximum maturity of 18 months. If the loan is for a revolving line of credit, the maturity is typically twelve (12) months, with annual reissuances allowed two times, for a maximum maturity of three years.
Four Unique Requirements of the EWCP Loan
1) An applicant must submit cash flow projections to support the need for the loan and the ability to repay.
2) After the loan is made, the loan recipient must submit continual progress reports. SBA does not prescribe the Lender’s fees.
3) SBA does not prescribe the interest rate for the EWCP.
4) SBA guarantees up to ninety (90) percent of an EWCP loan amount up to $1.5 million.
Guaranty Percents
For those applicants that meet the SBA's credit and eligibility standards, the Agency can guaranty up to ninety (90%) percent of loans (generally up to a maximum guaranty amount of $1.5 million).
Export Working Capital Program Loans (EWCP) Collateral A borrower must give SBA a first security interest equal to 100% of the EWCP guaranty amount. Collateral must be located in the United States
Export Working Capital - To learn more about this author, visit Start Your Business's Website.
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The Export Working Capital Program (EWCP) was designed to provide short-term working capital to exporters.
The SBA's Export Working Capital Program (EWCP) supports export financing to small businesses when that financing is not otherwise available on reasonable terms. The program encourages lenders to offer export working capital loans by guaranteeing repayment of up to $1.5 million or 90 percent of a loan amount, whichever is less. A loan can support a single transaction or multiple sales on a revolving basis.
Designed to provide short-term working capital to exporters, the EWCP is a combined effort of the SBA and the Export-Import Bank. The two agencies have joined their working capital programs to offer a unified approach to the government's support of export financing. The EWCP uses a one-page application form and streamlined documentation with turnaround usually 10 days or less. A letter of prequalification is also available from the SBA.
Maximum 7(a) Loan Amounts
Export Working Capital Program Eligibility (EWCP)
In addition to the eligibility standards listed below, an applicant must be in business for a full year (not necessarily in exporting) at the time of application. SBA may waive this requirement if the applicant has sufficient export trade experience. Export management companies or export-trading companies my use this program; however, title must be taken in the goods being exported to be eligible.
Most small businesses are eligible for SBA loans; some types of businesses are ineligible and a case-by-case determination must be made by the Agency. Eligibility is generally determined Business Type, Use of Proceeds, Size of Business, and Availability of Funds from other sources. The following links provide more detailed information about each of these areas.
Type Of Businesses Eligible
Use Of Loan Pproceeds
Size
Availability
The proceeds of an EWCP loan must be used to finance the working capital needs associated with a single or multiple transactions of the exporter.
Proceeds may not be used to finance professional export marketing advice or services, foreign business travel, participating in trade shows or U.S.support staff in overseas, except to the extent it relates directly to the transaction being financed. In addition, "proceeds may not be used" to make payments to owners, to pay delinquent withholding taxes, or to pay existing debt.
The applicant must establish that the loan will significantly expand or develop an export market, is currently adversely affected by import competition, will upgrade equipment or facilities to improve competitive position, or must be able to provide a business plan that reasonably projects export sales sufficient to cover the loan.
Export Working Capital Program (EWCP) Maturities
SBA guarantees the short-term working capital loans made by participating Lenders to exporters. An export loan can be for a single or multiple transactions. If the loan is for a single transaction, the maturity should correspond to the length of the transaction cycle with a maximum maturity of 18 months. If the loan is for a revolving line of credit, the maturity is typically twelve (12) months, with annual reissuances allowed two times, for a maximum maturity of three years.
Four Unique Requirements of the EWCP Loan
1) An applicant must submit cash flow projections to support the need for the loan and the ability to repay.
2) After the loan is made, the loan recipient must submit continual progress reports. SBA does not prescribe the Lender’s fees.
3) SBA does not prescribe the interest rate for the EWCP.
4) SBA guarantees up to ninety (90) percent of an EWCP loan amount up to $1.5 million.
Guaranty Percents
For those applicants that meet the SBA's credit and eligibility standards, the Agency can guaranty up to ninety (90%) percent of loans (generally up to a maximum guaranty amount of $1.5 million).
Export Working Capital Program Loans (EWCP) Collateral A borrower must give SBA a first security interest equal to 100% of the EWCP guaranty amount. Collateral must be located in the United States
Export Working Capital - To learn more about this author, visit Start Your Business's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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