What is an SBA Export Loans program?
The SBA Export Loans program is a set of three types of export loans that provide businesses with working capital & international trade financing. With the SBA export financing, businesses can get funding that may not be available like a traditional loan or other sources. The three SBA export loan programs are Export Express, Export Working Capital, and International Trade.
SBA Export Loan Types
Below we’ll go over all the loan types with a brief summary:
1. SBA Export Express Loan
The SBA Export Express loan program provides streamlined funding up to $500,000 in working capital to help small businesses with export activities. This program comes with a very simple application process and a quick approval turnaround time which makes this loan very appealing for export businesses needing lesser funding amounts.
The typical SBA Export Express loan rates and terms are:
- Funding amount: Up to $500,000
- Interest rates: 9.75% to 11.75%
- Terms: Up to seven years for a line of credit; up to 10 or 25 years for term loans
2. SBA Export Working Capital Loan
The SBA Export Working Capital loan program offers funding up to $5 million in working capital. This capital can be used to finance export transactions when the business has purchase orders from a foreign customer. SBA Export Working Capital loans can be used for letters of credit & for working capital to supplement longer payment cycles from customers.
The typical SBA Export Working Capital loan rates and terms are:
- funding amount: Up to $5 million
- Interest rates: 6% to 10% (no SBA limit but monitored for reasonableness)
- Terms: Up to three years (12 months is typical)
3. SBA International Trade Loan Program
The SBA International Trade loan program provides financing up to $5 million to small businesses that want to enter or expand into international markets. The eligibility and qualifications for the International Trade program generally mirror those of the SBA 7(a) loan program. If you have specific questions about the SBA Export Loan program, the SBA has international trade specialists available to answer your questions.
The typical SBA International Trade loan rates and terms are:
- Loan amount: Up to $5 million
- Interest rates: 7.50% to 10.00% (same as SBA 7(a))
- Terms: Up to 10 to 25 years
SBA Export Loan Requirements
To qualify for an SBA Export loan are similar to the requirements used for an SBA 7(a) loan with a few variations based on which SBA Export loan you’re approved for.
In general, you’ll need:
- Minimum credit score: 680
- Collateral: Short-term collateral like invoices & project contracts
- Personal guarantee: Required from all owners with 20% or greater ownership interest
- Other SBA loan requirements: No recent bankruptcies, foreclosures, or tax liens
In conclusion, the Export Express loan requires businesses to have been in business for at least one year & export products overseas. You don’t really need to have a year of experience in exporting but as long as your principals show significant experience exporting.
The SBA International Trade loan program provides export financing to small businesses that are able to work in new foreign markets, expand existing foreign markets, or that have been affected by imports, and that the loan will increase your competitiveness.