International Focus Magazine Vol. 2, #4 | Page 38

business How the USBA Helps Exporters Written by Najla Tanous- Mokarzel US Companies, small and medium size, can maximize their export busi- ness with help from the Small Business Administration’s (SBA) Export Work- ing Capital Program (EWCP) and Ex- port Express Program (EEP). export, the support of standby letters of credit, and the financing of post- shipment foreign accounts receivable. In this context, exports include direct exports as well as certain domestic sales that are destined for export. Houston is one of the top US areas ranked by growth in merchandise ex- port value. However, it takes money to play the game. Many small and medium size businesses invest the time and re- sources to develop export leads, only to discover that they can’t secure the credit to close the sales. Both companies and their lenders can benefit from SBA’s ex- port programs. These export programs allow a lender to be almost risk free and coupled with a longer loan term. The export loan can be used for either single or multiple export transactions. Generally, loan guarantees will be giv- en for specific export transactions, al- though in some cases guarantees will be approved for lines of credit. The duration of the transaction-based loan or line of credit, and its repayment, are tailored to fit the needs of the individ- ual business’ export transactions. Export Working Capital Program Small and medium firms account for over 90 percent of all US exporters but generate only 30 percent of the nation’s exports because these firms lack sufficient export working capital to reach foreign markets. Application procedures for the EWCP loan are streamlined with experienced SBA export lenders. Interest rates for these loans are not regulated by the SBA and are subject to negotiation be- tween the exporter and the lender. Export Express Small and medium businesses that ex- port may also take advantage of the SBA’s EEP. A 90% guaranty for loans Under the program, the SBA will guar- up to $500,000. The EEP is a stream- antee an approved loan request with a line program for exporters and lenders. repayment guaranty to the lender. The This is a unique export program where SBA guarantees 90% of a loan up to $5 the SBA allows the participating lend- million with various applicable terms. ers to use their own application forms, procedures, and analysis. The EEP is The loan proceeds can be used to fund predominantly used as a revolving line a number of pre- and post-export ex- of credit where the loan proceeds may penditures, such as the acquisition of be used to enhance a company’s ex- inventory, the payment of manufactur- port development, to fund participa- ing costs for goods designed for export, tion in a foreign trade show, finance a the purchase of goods or services for standby letter of credit, finance specific 38 iF Magazine | April 2017 export orders as well as the purchase of equipment and inventory. In addi- tion, the loan proceeds may be used as a term loan for the real estate acquisi- tion for the export business. For assistance and information regard- ing Houston’s most active lenders for export loans, please contact: Reginald Harley, SBA Export Manager: [phone] direct, [phone] mo- bile, or [email protected] Export Legal Assistance Network (Elan) The SBA and the Federal Bar Asso- ciation established the ELAN in 1983. ELAN attorneys are experienced in many export-related issues. Please contact Jaime Joiner at Joiner Trade Law [phone] for your one hour of complimentary legal assistance. Other Complimentary SBA Resources: For interested in exporting but have not exported previously, the SBA makes available: The Service Corps of Retired Execu- tives (SCORE), Stanley Cardoza, [phone]. University of Houston Small Busi- ness Development Center (SBDC), Roberta Skebo at [phone] or [email protected] NAJLA TANOUS, J.D., is the retired SBA Houston District Counsel and International Trade Officer.