The SBA Export Express program provides exporters and lenders a streamlined method to obtain SBA backed financing for loans and lines of credit up to $250,000. Lenders use their own credit decision process and loan documentation; exporters get access to their funds faster. The SBA provides an expedited eligibility review and provides a response in less than 24 hours.
How to Apply
Interested businesses should contact their existing lender to determine if they are an SBA Express lender. Lenders that participate in SBA’s Express program are also able to make Export Express Loans. Application is made directly to the lender. The lenders use their own application material in addition to SBA’s Borrower Information Form. Lenders approve the request and then submit a limited amount of eligibility information to SBA’s National Loan Processing Center. The SBA provides a response within 24 hours.
SBA’s Role in Export Express Financing
The SBA has placed a priority on helping small business exporters. 70% of all U.S. exporters have 20 or fewer employees. Most banks in the U.S. do not lend against export orders, export receivables or letters of credit. SBA provides lenders with up to an 85% guaranty on export loans as a credit enhancement, so that participating banks will make export loans that make the necessary export financing available.
SBA Export Express loans are available to businesses that meet the normal requirements for an SBA business loan guaranty. Financing is available for manufacturers, wholesalers, export trading companies and service exporters. Loan applicants must demonstrate that the loan proceeds will enable them to enter a new export market or expand an existing export market. Applicants must have been in business, though not necessarily in exporting, for at least 12 months.
The maximum Export Express line of credit/loan amount is $250,000. Participating banks receive an 85% SBA guaranty on loan amounts up to $150,000 and 75% on loan amounts between $150,000 - $250,000.
The SBA does not establish or subsidize interest rates on loans. Interest rates are negotiated between the borrower and the lender, but may never exceed SBA interest rate caps. Rates can either be fixed or variable, and are tied to the prime rate as published in The Wall Street Journal.
Lenders follow collateral policies and procedures that the lender has established for its non-SBA guaranteed loans.
Loan Maturity and SBA Fee
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 seven years. The SBA fee for an Export Express with a 12-month maturity or less is ¼% (0.25%) assessed on the guaranteed portion of the loan. For loan maturities longer than 12 months, the guaranty fee is 2% on loans up to $150,000 and 3% on loans between $150,000 and $250,000.
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.
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) provide technical assistance.
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.
Lender Training is Available
The SBA Senior International Credit Officers will routinely provide interested lenders with the necessary training to become proficient on the Export Express program. They will work individually with bank staff on questions during the application process. Contact your local USEAC to arrange for in-house training for your bank on SBA export loan products.
SBA staff can help in weighing financing options and risk mitigation, plus advise on SBA loan products and application procedures. Contact your local USEAC to learn more about the benefits of the Export Working Capital Program (EWCP) and whether your business might qualify for EWCP financing.
Source: Small Business Administration