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International Trade Loans

Written by: Start Your Business

Article Overview: If your business is preparing to engage in or is already engaged in international trade, or is adversely affected by competition from imports, the International Trade Loan Program is designed for you.

International Trade Loans

If your business is preparing to engage in or is already engaged in international trade, or is adversely affected by competition from imports, the International Trade Loan Program is designed for you.

International Trade Loan Eligibility

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.

Although 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 by four factors:

Type Of Businesses Eligible:
Size
Availability Of Funds From Other Sources:

Use Of Loan Proceeds

The proceeds of a SBA International Trade loan may be used to acquire, construct, renovate, modernize, improve or expand facilities and equipment to be used in the United States to produce goods or services involved in international trade; or the refinancing of existing indebtedness that is not structured with reasonable terms and conditions. There can be no working capital as part of an IT loand or as part of any refinancing. penetrate foreign markets.

A small business concern is engaged in international trade if, as determined by SBA, "the small business concern is in a position to expand existing export markets or develop new export markets."

A small business concern is adversely affected by international trade if, as determined by SBA, "the small business concern (i) is confronting increased competition with foreign firms in the relevant market; and (ii) is injured by such competition."

International Trade Loan Maturities

Loans for facilities or equipment can have maturities of up to 25 years.
Interest Rates
Fees

International Trade Loan Maximum Loan Amount

The maximum gross amount ($2 million) and SBA-guaranteed amount ($1.5 million) for an IT loan is the same as a regular 7(a) loan. However, there is an exception to the maximum SBA 7(a) guaranty amount to one borrower (including affiliates).

The maximum guaranteed amount can go up to $1,750,000 under the following circumstances: (1) The small business has been approved for an IT loan, and (2) the business has applied for a separate working capital loan (or loans) under EWCP and/or other 7(a) loan programs. When there is an IT loan and a separate working capital loan, the maximum SBA guaranty on the combined loans can be up to $1,750,000 as long as the SBA guaranty on the working capital loan does not exceed $1,250,000. In all cases, to receive the maximum SBA guaranty amount of $1,750,000, the financing package for the small business must include an IT loan that was approved after December 7, 2004.

International Trade Loan Guaranty Percent

For the International trade Loan, SBA can guaranty up to 85 percent of loans of $150,000 and less, and up to 75 percent of loans above $150,000. The maximum guaranteed amount is $1,250,000.

Loan Program Collateral

Only collateral located in the United States, its territories and possessions is acceptable as collateral under this program. The lender must take a first lien position (or first mortgage) on items financed under an international trade loan. Additional collateral may be required, including personal guarantees, subordinate liens, or items that are not financed by the loan proceeds.

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