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SBA

SBA. SBA EXPORT FINANCE PROGRAMS. U.S. SMALL BUSINESS ADMINISTRATION. Approximately 94% of all US businesses are classified as “small businesses’. [NAICS]

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SBA

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  1. SBA SBA EXPORT FINANCE PROGRAMS

  2. U.S. SMALL BUSINESS ADMINISTRATION • Approximately 94% of all US businesses are classified as “small businesses’. [NAICS] • SBA assists small businesses by guaranteeing bank loans up to 90% for export financing. SBA also provides complimentary loan application assistance and technical assistance. • Houston’s Assets: “Energy Capital of the World”, Texas Medical Center, NASA’s Space Center, the Port of Houston [#1 US port in foreign tonnage], the Houston Airport etc. have created a ripple effect promoting global markets for area businesses.

  3. ] INTERNATIONAL TRADE (IT) • ] EXPORT WORKING • CAPITAL (EWC) • ] EXPORTEXPRESS(EE) THREE EXPORT LOAN PROGRAMS: http://www.sba.gov/oit

  4. S.B.A. offers 75% Guaranty: 1] INTERNATIONAL TRADE LOAN GUARANTY (IT 75%). Loan for Business-Related Real Estate, Equipment, and Working Capital [COLLATERAL MUST BE LOCATED IN THE U.S.]

  5. INTERNATIONAL TRADE PROGRAM (IT 75%): • For a business: 1] engaged or preparing to engage in export or2] adversely affected by imports. • Loan Proceeds: To purchase, construct, renovate fixed assets: such as office building, factory, warehouse, export storage, and/or equipment. • Not for refinancing or debt payment. • Unique Requirement: Applicant must provide a business plan supporting projected export sales.

  6. INTERNATIONAL TRADE PROGRAM (IT 75%): • SBA’s maximum guaranty exposure for a fixed asset International Trade export loan is : • $ 1 Millionfor an International Trade bank loan. The maximum allowable loan amount is $ 2MM. • SBA loan guaranty is up to 75%. • Maximum loan term may be up to 25 years for real estate and 10 years for equipment. • All fees are controlled by SBA Regulations. • Collateral securing the loan must be located and used in the U.S.

  7. U.S.S.B.A. 2] EXPORT WORKING CAPITAL LOAN GUARANTY PROGRAM (EWC 90%). Collateral items purchased with loan funds are exported out of the U.S.

  8. EXPORT WORKING CAPITAL PROGRAM (EWC 90%): The #1 need of exporters:FINANCING. • EWC relieves bankers from risk exposure: SBA may guaranty a bank loan up to $1,000,000.00 or 90% of the loan amount, whichever is less. Maximum bank loan amount for this program is also $ 2 Million . • SBA can help exporters cash-in on the global market by providing a Government guaranty for a bank loan.

  9. EWC (90%): What is it? An Export Loan Program which: • Provides short-term loan or a revolving line of credit financing to exporters. • Encourages lenders to make export loans almost risk free.

  10. EX-IM BANK COUNTRY LIMITATION SCHEDULE: 1) Schedule highlights those foreign markets the US Govt. supports or restricts. www.exim.gov/country/cntlimit.html 2) Refer to Schedule for any export restrictions on buyer’s country. 3) Restrictions imposed for Political, Economic or Legislative reasons.

  11. EWC (90%): What does it cover? • Pre-shipment working capital: To purchase raw materials for manufacturing, or finished goods for direct or indirect export. • Indirect Exports: Goods sold to another U.S. company, however, final destination of goods is overseas.

  12. EWC (90%): What does it cover? • Post-shipment exposure: extends the loan payment term allowing the seller time to receive sales proceeds from the buyer and/or to complete post shipment operations, such as installation or final assembly, performed by US employee of seller, in the destination country.

  13. EWC (90%): What does it cover? • Combination of pre- and post- shipment financing [ for example: manufacture modular housing, allowing for time to assemble overseas, and payment from buyer].

  14. EWC (90%): what does it cover ? (continued) Services on a Existing Contract: Foreign contract for construction, engineering, architectural etc. [loan proceeds for inventory required to perform on contract, travel, US payroll expenses etc.]. Standby Letter of Credit: Bank guarantees the work performance overseas of the U.S. exporter [similar to a Performance Bond].

  15. EWC: Who is eligible? The exporter must: • Must be as U.S. citizen or have a valid “Green Card” [must be verified with INS]. • Meet SBA’s industry size-standards . • Have been in business for at least 12 months [not necessarily in exporting]. • IRS tax returns must be verified.

  16. By-Employees:SIZE STANDARDS Manufacturing ---- 500 to 1500 employees or less. Mining ---- 500 employees or less. Wholesale Trade ---- 100 employees or less. By-Annual Gross Receipts: Gen. & Heavy Construction--------------$ 27. 5 million Special Trade ----------------------------$ 11.5 million Retail Trade -------------------$ 5. to $ 21. million Real Estate -------------------$ 5. to $ 18.5. million Services ---------------- $ 2. 5 to $ 21.5 million Agriculture -------------- $ 0.750 to $ 9. million North American Industry Classification System (NAICS).

  17. EWC: What collateral will be required to support the loan? • Assignment of proceeds from one or more: Confirmed Letter of Credit. Foreign receivables. Service contract. EXIM export credit insurance. • Fixed assets ( usually to secure long-term loans [1 year or more] or weak credit). • Personal guarantees by owners:( owners with 20% or more ownership in business).

  18. MAJOR DIFFERENCE:EWC: What Does SBA Look For?The Credit Focus: The transaction, NOT the business. • Is the deal“DO-ABLE” ? • How reliable is therepayment source? • Can the exporterperform ? Does the exporter have the expertise?

  19. EWC: SBA Fees & Interest Rates SBA Guarantee Fees: • Loan term of 12 months or less: 0.25% of guaranteed loan amount. • Loan term over 12 months: regular 7a fee applies (between 1%-4%). Interest Rates & Lender Fees: • Negotiable between lender and customer: not controlled by SBA.

  20. 3] EXPORTEXPRESS (EE 75-85%) • Maximum loan amount : $ 250,000. • SBA guaranty up to 85% for $150,000 or less. For loans from $150,000 to $250,000, SBA guaranty 75%. • Unique program where loan funds may be used to market your goods/services overseas. In addition, the purchase of fixed assets or working capital. • Only SBA Export program where Lender uses its own loan application, credit, and processing procedures. Only one SBA documents is required. • No criminal activity in personal history.

  21. EWCP: Some limits • Purchase of American-made equipment and products ”to the greatest extent practicable”. • Limited sales to foreign military (U.S. Munitions List prohibited). • SBA follows EXIM Country Limitation Schedule.

  22. Helpful Websites: Basic Guide toExport:http://www.export.gov; http://www.tradenet.gov;http://www.ita.gov/tic Market research: http://www.usatrade.gov Market Dev.&Links:http://www.usatrade.gov http://www.buyUSA.com;Europages Business directory: http://www.europages.com; Trade Shows Worldwide: http://www.tscentral.com ExportRegulations:http://www.bxa.doc.gov; ATA carnet: http://www.usib.org.

  23. E. L. A. N. • Export Legal Assistance Network (E.L.A.N.) http://www.fita.org/elan • U. S. Small Business Administration and Federal Bar Association. • Initial consultation is FREE. Contact: Sameer Mohan Esq. or Jamie Joiner Esq. Baker & Hostetler LLP (713) 646-1314

  24. SBA-Sponsored FREEExport Resource Assistance • SBA International Trade Officer:Najla Tanous (713) 773-6522/23: To finance existing export orders. • University of Houston S.B.D.C.Roberta Skebo (713) 752-8400 : Free loan packaging for an SBA export loan application. • SCORE - Business Information Center (BIC), (713) 773-6549: Start-up information to export. • S.B.D.C. International Trade Center Carlos Lopez, Director, for technical assistance.

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