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Another Voice: Flexible financing program benefits exporters

By Patrick Hayes

U.S. small and medium sized businesses exported more than $750 billion in goods and services in 2014. For comparison purposes, this represents more than the entire gross domestic product of Switzerland.

Exports out of the Buffalo metropolitan statistical area were $4.4 billion in 2013. And it’s not just the “medium” sized businesses that are producing these exports. In fact, 70 percent of all U.S. exporters have 20 employees or less. These are companies that are entrepreneurial by nature and have the keen insights and instincts to recognize that the market for their goods and services is not limited by the borders of the United States.

They see growth opportunities in the international marketplace and are nimble enough to go out and win those foreign orders.

There is a Small Business Administration loan program that is perfectly suited to meet the financing needs of these exporting firms. The Export Express loan program is streamlined and flexible. The maximum loan amount is $500,000 and there is no minimum amount.

Export Express is streamlined in that it allows participating lenders to use their own internal processes and forms and to make their own credit decision. The lenders submit the application to the SBA and are guaranteed to receive a response in 36 hours or less. Lenders receive a 90 percent guaranty on loan amounts of $350,000 or less and 75 percent guaranty on amounts between $350,000 and $500,000.

The money from Export Express can be used for anything that will help support a company’s export activity. Eligible uses of proceeds include permanent working capital, machinery and equipment, real estate, standby letters of credit and export working capital.

The program is open to those small businesses that have been in business for at least 12 months and have a need for financing to support their export activity.

Companies can apply for an Export Express loan at their current bank or credit union. In addition to the regular information their lender will normally require, the exporter also submits information on the goods or services (yes, services qualify!) they are exporting, a brief description of how the proceeds will help their export activity, a 12-month estimate of export sales and the countries to which the company is exporting.

A small business should not lose a viable export sale due to a lack of working capital.

Whether the business exports to Canada (the No. 1 market for U.S. exports), Mexico (No. 2), China (No. 3) or Switzerland (No. 16), there is a streamlined, flexible loan program to meet its financing need.

Patrick Hayes is the eastern U.S. regional trade finance manager for the U.S. Small Business Administration.