Looking for export working capital? These government-backed programs are some good options.
The logical first step to take when seeking to finance your export sales is to approach the local commercial bank that you have established a relationship with. However, having export-related collateral can create a bit of a challenge as some commercial lenders may be hesitant to extend export finance when the loan application ties in with export-related collateral.
Luckily, both U.S. Small Business Administration (SBA) and U.S. Export-Import Bank (EXIM) offer programs to overcome the obstacle and to help exporters grow. Through government-backed export working capital loans, U.S. exporters can obtain financing through participating lenders when commercial financing is not an option or when their borrowing needs are greater than the credit standing of lenders.
SBA Export Finance Programs
Generally speaking, SBA facilitates loan sizes up to $5 million and the borrowers must meet SBA eligibility and size standard. There is no application fee nor restrictions regarding foreign content or military sales. Early-stage businesses may qualify for the program with strong management.
EXIM Export Working Capital
EXIM processes loans of all sizes. The loan can be used to pay for materials, equipment, supplies, labor, and other inputs to fulfill export orders. Compared to SBA export finance programs, its eligibility requirements look slightly different.
- Borrowers must be a US company with at least one year of operating history and positive net worth.
- Must ship from the United States exports with a minimum of 50% of US content based on all direct/ indirect costs (ie. Labor, materials, administrative costs)
- EXIM can’t support exports of military, and defense products and services, or purchase made by military buyers.