The SBA’s International Trade Loan (ITL) provides small businesses with enhanced export financing options for their export transactions. It is designed to help small businesses enter and expand into international markets and, when adversely affected by import competition, make the investments necessary to better compete. The ITL offers a combination of fixed asset, working capital financing, and debt refinancing with the SBA’s maximum guaranty – 90 percent – on the total loan amount. The maximum loan amount is $5 million in total financing.
The SBA can guaranty up to 90 percent of an ITL up to a maximum of $4.5 million, less the amount of guaranteed portion of other SBA loans outstanding to the borrower. The maximum guaranty for any working capital component of an ITL is $4 million. Additionally, any other working capital SBA loan the borrower has are counted against the $4 million guaranty limit.
For the facilities and equipment portion of the loan, proceeds may be used to acquire, construct, renovate, modernize, improve or expand facilities or equipment in the U.S. to produce goods or services involved in international trade. Working capital is an allowable use of proceeds under the ITL. Proceeds may be used for the refinancing of debt structured with unreasonable terms and conditions, including any debt that qualifies for refinancing under the standard SBA 7(1) Loan Program.
Maturities on the working capital portion of the ITL are typically limited to 10 years. Maturities of up to 10 years on equipment unless the useful life exceeds 10 years. Maturities of up to 25 years are available for real estate. Loans with a mixed use of fixed-asset and working-capital financing will have a blended-average maturity.
Lenders may charge between 2.25 to 2.75 percent above the prime rate depending upon the maturity of the loan. Interest rates on loans of %50,000 and less can be slightly higher.
Applicants must meet the same eligibility requirements as for the SBA’s standard 7(a) Loan Program.
Applicants must also establish that the loan will allow the business to expand or develop an export market or, demonstrate that the business has been adversely affected by import competition and that the ITL will allow the business to improve its competitive position.
Foreign buyers must be located in those countries wherein the Export-Import Bank of the U.S is not prohibited from providing financial assistance.
A small business seeking an ITL must apply to an SBA-participating lender. The lender will submit a completed Application for Business Loan (SBA Form 4), including all exhibits, to the SBA. Visit www.sba.gov to find your local SBA district office for a list of participating lenders.
A small business exporter wanted to qualify as adversely impacted from import competition must submit supporting documentation that explains that impact, and a plan with projection that explains how the loan will improve the business’ competitive position.
SBA Export Express offers flexibility and ease of use to both borrowers and lenders. It is the simplest export loan product offered by the SBA and allowed participating lenders to use their own forms, procedures and analyses. The SBA provides the lender with a response within 36 hours.
This loan is subject to the same loan processing, closing, servicing and liquidation requirements as well as the same maturity terms, interest rates and applicable fees as for other SBA loans.
The SBA provides lenders with a 90 percent guaranty on a loan up to $350,000 and a 75 percent guaranty on loans more than $350,000 up to the maximum of $500,000
Loan proceeds may be used for business purposes that will enhance a company’s export development. Export Express can take the form of a term loan or a revolving line of credit. As an example, proceeds can be used to fund participation in a foreign trade show, finance standby letters of credit, translate product literature for use in foreign markets, finance specific export orders, as well as to finance specific export equipment purchases, and inventory or real estate acquisition.
Proceed may not be used to fiancé overseas operations other than those strictly association with the marketing and/or distribution of products/services exported from the U.S.
Any business that has been in operation, although not necessarily in exporting, for at least 12 full months and can demonstrate that the loan proceeds will support its export activity is eligible for Export Express.
Interested businesses should contact their existing lender to determine if they are a 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. Lenders use their own application material in addition to SBA’s Borrower Information Form. Lenders’ approved requests are the submitted with a limited amount of eligibility information to SBA’s National Loan Processing Center for review.
The SBA’s Export Working Capital Program (EWCP) assists lenders in meeting the needs of exporters seeking short-term export working capital. Exporters can apply for EWCP loans in advance of finalizing an export sale of contract. With an approved EWCP loan in place, exporters have greater flexibility in negotiating export payment terms – secure in the assurance that adequate financing will be in place when the export order is won.
The SBA does not establish or subsidize interest rates on loans. The interest rates can be fixed or variable and is negotiated between the borrower and the participating lender.
The export-related inventory and the receivables generated by the export sales financed with EWCP funds will be considered adequate collateral. The SBA requires the personal guarantee of owners with 20 percent or more ownership.
Application is made directly to SBA-participating lenders. Businesses are encouraged to contact SBA staff at their local U.S export Assistance Center to discuss whether they are eligible for EWCP and whether it is the appropriate tool to meet their export financing needs. Participating lenders review/approve/ the application and submit the request to SBA staff at the local U.S Export Assistance Center.
There are 20 U.S Export Assistance Centers located throughout the U.S. They are staffed by SBA, U.S Department of Commerce and Export-Import Bank of the U.S. personnel, and provide trade promotion and export-finance assistance in a single location. The USEACs also work closely with other federal, state, and local international trade organizations to provide assistance to small businesses.
To find your nearest USEAC, visit: www.sba.gov/content/us-export-assistance-centers.
You can find additional export training and counseling opportunities by contacting your local SBA office.
The Chafee Center provides comprehensive international trade services for businesses to expand into international markets. The Center has an extensive network of strategic partners around the world. In addition to our partners, we have an in-house staff, a team of international specialists and student researchers from Bryant and other regional universities and colleges to help companies reach their international goals. We assist companies both locally and regionally by providing:
• International market research
• Market entry strategies for countries around the world
• Assistance in developing international channel partners
• Assistance in developing global pricing models
• SWOT analysis: (Strengths, Weaknesses, Opportunities and Threats)
• International business plan writing
• Assessment of a company's global supply chain strategy
Through these programs, the Chafee Center assists more than 200 companies with international consulting needs annually.
The Chafee Center provides companies and government agencies with comprehensive independent research. The comprehensive reports are used in a wide range of activities, covering areas such as economic planning; measuring the impact of existing or planned regulations; solving budget problems; making best use of local, regional or national resources; determining best markets; taking advantage of emerging opportunities in clean energy and high technology; improving and expanding infrastructure; and determining export opportunities. Some examples include:
• Rhode Island Port Study
• Economic Studies
• Energy Studies (e.g. cost of sales)
• Country Specific Studies
• Rhode Island vs. National vs. Global Trade Export/Import Studies
In addition to providing international business consulting services, the Chafee Center also works with Bryant’s International Business faculty to partner with regional firms who want to expand globally – some for the first time and others who want to move to the next level in exporting their products and services. Working in partnership with the Chafee Center, students enrolled in Bryant’s International Business (BSIB) program work in teams as part of the senior year IB practicum to study these firms, conduct market research, and develop actionable strategic plans to help them achieve their goals.
The Chafee Center houses the World Trade Center Rhode Island and the Rhode Island Export Assistance Center. Strong partnerships with Commerce RI and other regional and national business development programs enable the Chafee Center to offer a range of resources for companies, universities, and government organizations.
Through the Center’s strong partnership with Commerce RI, additional programs are available to support local companies in their export activities. Commerce RI's Export management training grant program provides funding to Rhode Island companies for customized export training programs, including business plan development, market entry strategies, export logistics, international trade show development, certification training and foreign language training. This program is offered in partnership with the Governor's Workforce Board.
Eligible Rhode Island companies may apply for up to $5,000 in matching funds to address their international training needs. Consortiums may receive additional funding. The goal of the Export Management Training Grant Program is to create jobs in Rhode Island by boosting exports.
Work with businesses to develop customized training to fit their export needs. Companies may implement training in the following areas: International Business Plan Development; Market Entry Strategies; Export Logistics; International Business Development Mission/ Trade Show Development; Language Training. Customized export training is funded by the Governor's Workforce Board and administered by Commerce RI.
Through its relationship with Commerce RI, the Chafee Center provides a trade mission program that coordinates trips to foreign countries for Rhode Island companies interested in exporting. The Commerce RI export assistance team helps companies develop detailed export sales and marketing goals, compelling product descriptions and distribution strategies. Based on a company's needs, the export assistance team can provide market research in target countries and schedule customized country visits. Commerce RI also provides in-country logistical support, as well as pre- and post-mission support services.
At the Bryant Economic Summit each year, usually in March, some 200 business, government, and academic leaders from throughout Rhode Island and the region discuss and debate the local and regional economies.
At World Trade Day held in May each year, business leaders from around the region attend for:
• An insider’s view into regional firms achieving global success.
• Interactive discussions on best practices for navigating the global marketplace.
• Networking and collaborate to build relationships, partnerships, and processes to achieve their goals.
The annual Northeast Supply Chain Management Summit held each year in August brings together executives, business owners, supply chain experts and professionals for in-depth conversations related to best practices, innovative technology trends, and the rules and regulations affecting the supply chain.
The World Trade Center Rhode Island (WTCRI) is a partnership between the State of Rhode Island and Bryant University's Chafee Center for International Business. For an annual fee of $250, members gain access to a powerful worldwide network of companies and individuals in both the public and private sector. This network provides access to business, academic, governmental and cultural relationships and opportunities. By utilizing this network, it becomes easier to understand local business practices and cultural nuances within a country as you extend your organization globally. Whether you need market entry assistance, directions within a city or help finding suitable accommodations for lodging or business transactions, the WTC Association is there to help. Other services include:
• World Trade Center website membership access
• WTC Network Card - offers discounts and connections to worldwide meeting facilities, hotels and airfares through the network of over 300 member WTC's
• Trade Card - your link to electronic commerce
• One free seminar
• 25% discount on the ITDN for an individual subscription
• Access global relationships through 279 offices worldwide
The U.S. continues to lead the world in the dollar value of manufacturing output. However, the overall manufacturing industry has been on a decline in the U.S. for three decades as many labor intensive industries moved their manufacturing operations offshore and as growing nations took advantage of market opportunities. Today, less than 10 percent of U.S. employment is in manufacturing. As GE CEO Jeff Immelt has noted, “There is nothing predestined or inevitable about the industrial decline of the U.S., if we as a people are prepared to reverse it.”
The Chafee Center is working with key groups, such as RIMA (the Rhode Island Manufacturing Association) and RIMES (the Rhode Island Manufacturing Extension Partnership) to help renew manufacturing in the U.S. by focusing on export opportunities. While three-fourths of the world’s market is outside of U.S. borders, few U.S. companies export. A January 2010 report from the U.S. International Trade Commission shows that less than one percent of the 27 million U.S. Small and Medium Enterprises (SMEs) export. Given the current state of the U.S. economy and the need for jobs in the U.S., more companies need to find new markets. There is a clear opportunity for these companies to take advantage of the potential demand for their products and services in the global market. Such companies clearly need help in getting started, finding the opportunities, understanding the process and acquiring the needed financial and other resources. This is the key value provided by the Chafee Center through many of its programs, including a unique Global Business Opportunity Center planned for 2011.