SBA : Trade Financing Tools for Export Success Trade Promotion Coordinating Committee Training 2012 Dennis R. Chrisbaum, Director International Trade Finance.

Slides:



Advertisements
Similar presentations
SBA EXPORT LOAN PROGRAMS
Advertisements

Export Payment Methods and Financing Webinar Tekle Sebhatu, Ph.D. November 18, 2011
U.S. Small Business Administration International Trade Finance Programs ABAOC PROCON Conference Anaheim CA October 14, 2010.
Financial Support Enabling U.S. Exporters to Increase Their Sales.
Farm Service Agency Farm Loans Program Lender of First Opportunity.
Government Export Financing Programs.  Ex-Im Bank is an independent agency of the U.S. government.  The overall purpose of which is to: -Aid in financing.
U.S. Small Business Administration Small Business Financing.
U.S. Small Business Administration International Trade Finance Programs Green Construction Trade Mission To Brazil Executive Briefing Los Angeles CA May.
U.S. SBA EXPORT LOAN PROGRAMS Robert L. Elsas, Regional Manager SBA Export Solutions Group U.S. Export Assistance Center 601 Walnut Street Suite 580W Philadelphia,
Debt Financing ETP Courage: Risk and the Dimensions of Work Life Cycle of a Business Venture Bootstrapping Self, Friends and Family Equity Financing.
Capital Access: SBA Financing Options for Your Small Business Presented by U.S. Small Business Administration’s Colorado District Office.
Creating New Opportunities
US Government Finance Programs to Help Expand Your Export Sales SBA Loan Guaranty Programs Designed to Assist American Small Business Exporters.
Trade Financing Solutions Export-Import Bank of the United States Increasing Your Export Sales… While Minimizing Risks!
John A. Emens, Executive Director – Partner Development CFS International Capital Corp April 14 th, 2010 UPS Headquarters 16 th Annual Georgia Tech Global.
Export Insurance & Risk Mitigation Best-Kept Secrets for Reducing Costs and Risks in Exporting December 11, :00 – 11:00 AM.
Lending the SBA Way Robert Chavarria U.S. Small Business Administration Jacksonville North Florida District.
SBA Loan Programs for SOCMA members September 15,
Jobs Through Exports E XPORT -I MPORT B ANK of the U NITED S TATES E XPORT -I MPORT B ANK of the U NITED S TATES Trade Financing Solutions Medical Technologies.
SBASBA EXPORT FINANCE PROGRAMS SBA EXPORT FINANCE PROGRAMS.
Jobs Through Exports E XPORT -I MPORT B ANK of the U NITED S TATES E XPORT -I MPORT B ANK of the U NITED S TATES Trade Financing Solutions Increasing Your.
1 Trade Finance Products SBA Export Express International Trade Loan (ITL) Export Working Capital Program (EWCP)
EXPAND YOUR BUSINESS INTERNATIONALLY FINANCING SUPPORT TO ORGANIZATION OF WOMEN IN INTERNATIONAL TRADE.
CPE Forum Financing Exports November 9, 2010 Helping you start, grow and succeed.
U.S. Small Business Administration The SBA Advantage — Resources and Programs for Success SBA Programs & Services.
FINANCING EXPORTS Helping small businesses to start, grow and succeed.
LOGISTICS, TRADE AND TRANSPORTATION SYMPOSIUM Export Financing February 26, 2014 Gulfport, MS.
Trade Financing Solutions Export-Import Bank of the United States Trade Financing Solutions Increasing Your Export Sales.
Global Trade Solutions International Payment & Finance Methods
THE EXPORT- IMPORT BANK OF THE US 2010 Northwest Ohio Manufacturing Forum Toledo, OH Friday, November 12, 2010.
SMALL BUSINESS AND THE INTERNATIONAL MARKETPLACE A Report by the U.S. Small Business Administration- Office of International Trade.
Export-Import Bank of the United States Working Capital Guarantee Program Presented by: Walt Trask Vice President International Trade Finance March 23,
CHAPTER XXXIV FINANCING EXPORTS
Letter of Credit Basics Seminar Foreign Receivable Financing Programs Davi Tserpelis Senior Vice President Commercial Banking –
1 Indiana Statewide Certified Development Corporation Jean Wojtowicz Executive Director.
Part V Short-Term Asset and Liability Management
Access to the Global Market October 28, 2011 SBA Trade Programs ExIm Bank Programs.
Santa Ana District Office. Santa Ana District Office 10 REGIONAL OFFICES 68 SBA DISTRICT OFFICES 19 USEACs.
Trade Financing Solutions Export-Import Bank of the United States GLOBAL CALIFORNIA 2009 GLOBAL CALIFORNIA 2009 EX-IM BANK The Exporter’s Financing Assistance.
Illinois District Office. 2  In FY 2010, SBA Nationally  delivered over $17.0 billion in financing,  guaranteed over 60,771 loans  In FY 2010, SBA.
Part 4 PowerPoint Presentation by Charlie Cook Copyright © 2003 South-Western College Publishing. All rights reserved. All rights reserved. Finding Sources.
AIM Quarterly Seminar EXIM BANK FINANCING September 25, 2007.
U.S. Small Business Administration Export Finance Programs
U.S. Small Business Administration The Three C’s of the SBA.
SME Conference 2014 Embassy of Malaysia, Washington DC October 15, 2014.
SBA Financing Options for Your Small Business Hosted by U.S. Small Business Administration Colorado District Office.
U.S. Small Business Administration Programs & Services.
America’s Small Business Resource. 2 The U.S. Small Business Administration  Our Mission  Assist small business in getting started, stay in business.
Financial Support Enabling U.S. Exporters To Increase Their Sales Our Products Make the Difference Minimize risk Level the playing field Supplement commercial.
© Copyright 2005 SunTrust Banks, Inc. Global Trade Solutions Export Financing Methods October 17, 2008 Norfolk, Virginia.
Small Business Administration  Created in 1953 to develop and aid small businesses in the U.S. Types of Financing  Real Estate  Franchises  Inventory.
SBA EXPORT LOAN PROGRAMS Robert Coffey District International Trade Officer U.S. Small Business Administration 600 Dr. Martin Luther King Jr. Place, Room.
SBA Lending Division SBA Lending Division October 2015.
Bill Houck, Regional Manager (DC,VA,WV,MD,DE) Export Solutions Group Office of International Trade Export Loan Guarantee.
NCACC Economic Development Symposium April 29, 2014.
SBA 504 Loan Program Long Term Fixed Asset Financing For Small Businesses.
Finance Your Exports With SBA Help World Trade Day Indianapolis, IN April 25, 2014 John O’Gara Export Solutions Group U.S. Small Business Administration.
International Trade and Exporting Carlos Sosa Regional Manager, SBA - Office of International Trade.
Financing Your Exports Unraveling the mysteries of trade finance Jeff Deiss Regional Export Finance Manager SBA Office of International Trade San Francisco,
International Documentary Products and Trade Finance Financing Your Exports and Getting Paid May 25, 2011 Valerie Warga Global Trade Solutions ,
Trade Finance: Risks and Rewards. Export Finance Adds Complexity More payment options More Risks Political Risks War is not the only political risk! Payment.
US Small Business Administration Acquisition Financing Program SBA 7a Program For Profit US Businesses Only Maximum loan amount of $5,000,000 Loan proceeds.
Financing Clean Energy Exports Export-Import Bank of the United States Rob Guthrie, Regional Director San Francisco Branch Office.
Trade Finance and Payment Methods May 9 th, 2013 Presented by: Berenice Carmona Jaime Martinez International Trade Center.
What is the SBA? The U.S. Small Business Administration (SBA) is a small independent Federal agency created in 1953 to assist, aid, counsel and protect.
Celtic Express Loans Product Overview
EXPORT FINANCING OVERVIEW
Capital (Export Finance). Capital (Export Finance)
EXIM Bank Trade Financing Solutions for Export Success!
SBA’s Office of International Trade
Presentation transcript:

SBA : Trade Financing Tools for Export Success Trade Promotion Coordinating Committee Training 2012 Dennis R. Chrisbaum, Director International Trade Finance Office of International Trade U.S. Small Business Administration Tel: ;

Small Business Jobs Act of 2010: Support for SME Exporter s DescriptionSBJA Support  Established an Independent office of International Trade: Increased Staff and Strengthened Export Counseling Resources.  Stronger Inter-Agency Collaboration Stronger Office of International Trade  State Trade and Export Promotion (STEP) Grants Pilot: The law authorized $30 million per year for three years (appropriated funds for two years) in competitive grants for states to assist business owners to expand their exporting  Small Business Development Center (SBDC) Counselor Training: TPCC Certificate training offered to SBDC counselors; Pilot launched at SBDC annual conference in San Antonio in 2010 with subsequent training in San Diego in On-line exam, Management & Technical Assistance  Export Express Pilot Becomes Permanent The law turned the Export Express pilot loan program into a permanent program with 90% guarantees for loans up to $350,000 and 75% for loans greater than $350,000, up to the limit of $500,000.  Permanent higher loan limits for Export Working Capital Program (EWCP) and International Trade Loans: The Act significantly increased maximum loan sizes for both EWCP and International Trade Loans to $5 million Enhanced Export Finance Programs 2

Financing Options for SME Exporters 1.Equity: friends, family and fools 2.Domestic term loans: typically for business start-up or expansion; fixed assets and permanent working capital—7-25 years 3.Working capital: revolving line of credit to finance on- going operational or transactional costs, 1-3 years 4.Export credit insurance: to mitigate foreign buyer risk of non-payment 5.Buyer financing: foreign buyer receives the loan and pays the exporter on shipment 6.Investment financing: foreign direct investment

SBA Loans for Exporters 1. International Trade Loan (ITL)—up to $5,000,000 --either: a) expanding because of exports, or b) adversely impacted by imports --maximum guaranty: $4.5 million, 90% (permanent) --a combination of fixed assets or term loan with W/C * maximum Working Capital guaranty: $4,000,000 --maximum term: 25 years; 10 years for working capital --refinancing is allowed; can be process by PLP-SBA 7(a) lenders --can be used for “on-shoring” if conditions above are met --business plan required & application must document eligibility requirements (i.e. export projections or evidence of adverse impact by imports) --indirect exporting is a qualifying eligibility criteria

SBA Loan Programs for Exporters 2. Export Express Program—to $500,000 to $350,000 with 90% guaranty to $500,000 with 75% guaranty Processed by SBA-approved Export Express lenders Working capital: 7 years; Fix assets: up to 25 years Required: In business for at least 12 months (can now be waived by lender if the applicant’s key personnel have demonstrated export expertise and successful business experience and lender does conventional underwriting, not relying on credit scoring) Entering or expanding in foreign market

Requirements for Export Express Four Questions, Four “Yes” Answers, SBA Form 1920-C 1.in business for at least one year (can now be waived by lender) 2.entering a new or expanding in an existing foreign market 3.not financing offshore operations 4.not selling to a prohibited country—Exim’s CLS Add: Anticipated annual export sales for the first year— enter on SBA Form 1920-B.

Export Express: Use of Proceeds Proceeds may be used for any “export development activity,” such as: Translation of product literature or website Participation in a trade show or on a trade mission transaction-specific financing of export deals, including standby letters of credit general lines of credit for export purposes term loans for permanent working capital, machinery, equipment, or real estate used in the production of goods or services for export Indirect exports qualify

US Government Loans for Exporters 3. Export Working Capital Loan—90% guaranty -- SBA: loans to $5 million; Eximbank: no upper limit -- SBA: Maximum guaranty, $4.5 million --SBA: No minimum ratios; Eximbank has several RMA minimum ratios Transaction-Based Financing (Purchase order financing) Single Order or Revolving Line Most supplier and production costs through collections Or, Asset-Based Line-of-Credit Working Capital for pre-shipment, post-shipment or both requirements Borrowing Base: inventory, WIP, (insured) A/R

Export Working Capital Eligibility SBA’s 7(a) size and ownership standards apply based on NAICs--Manufacturing: under 500 employees; can go as high at 1,500 employees Or, Tangible Net Worth under $15 million and Net Income over last 2 years averages less than $5 million Product shipped from U.S.A. or services provided and invoiced by U.S. entity 12 months of operating history or proven expertise Transaction- or asset-based loans

Export Working Capital Eligibility Disbursed against specific transactions and/or resulting (insured) receivables Eximbank’s country limitation schedule (CLS) applies. See: SBA has no requirements on U.S. content or military sales Eximbank has a U.S. content requirement and prohibition against military sales

EWCP—It’s the Transaction Evidenced by Purchase Order, L/C or signed contract and Acceptable methods of payment by the foreign buyer: Cash in Advance Letter of Credit Documentary Collections Open Account (insured) Open Account (no insurance)

Use of Proceeds—Think Transaction To acquire/produce goods or services for export – Pre-shipment: inventory, WIP, Labor To support the accounts receivable of such foreign sales – Post-shipment: typically with credit insurance, but that can be waive d for qualified buyers To support standby letters of credit as part of the transaction – Typically serving as a performance, bid or advance payment guaranty

EWCP—Pre-shipment Working Capital Order: $160k Oregon & Ash Flooring for National Performing Arts Center, Seoul, S. Korea Transaction: $15k advance payment $145k L/C payable at sight L/C, without confirmation Eximbank insured LC payment Expiry, four months; 4 month loan Working Capital Need: $115k to produce order Company: Second export order Order=27% of last year sales

Export Working Capital: Asset-based Line Japan Sales (70% of total sales): Animal supplements $1.5 million/year—one distributor Transaction: Ongoing sales Contract manufacturer—30 days terms but buyer extended 60-day terms Eximbank: Single Buyer Credit Insurance Policy Working Capital Needed: $360k revolving, asset-based line to support inventory & insured A/R 90% advance rate

EWCP: Support Standby L/C Order $660K for 9 modular pumping units for a mine in Chile Transaction: 50% ($330k) advance payment 20%, final shipment; 20% delivery to mine site; 10% held back as 12-month warranty Working Capital Need $330k to support Standby L/C for advance payment, 3 months

Indirect Exports Qualify for EWCP Loans Applicants who produce products or services that enter into the export channel, but do not directly export their products, are eligible for EWCP financing – Manufacturers using an Export Trading Company – Suppliers to other domestic manufacturers that export directly Requires certification from domestic customer that goods are, in fact, being exported.

EWCP: Transactional Collateral 1.First lien on all assets being financed: – Typically inventory, WIP and A/R 2.Assignment of proceeds under: – documentary letters of credit – credit insurance policies 3.Other assets as required by the lender 4.Personal guarantees of 20% or more owners

SBA EWCP Fees and Analysis Guaranty fee: SBA: 1/4% of guaranteed amount if 12 months or less Deals initially booked for 12 months or less can be “re- issued” for ¼ of 1% the following year. Lender Pays (on all SBA loans).55% on outstanding amount calculated on monthly basis Borrower and lender negotiate Interest Rate and fees; lender is required to disclose this information to SBA Analysis: 1.is the deal structured correctly? 2.can the borrower perform as agreed? 3.can we get paid, i.e. how secure is the method of payment?

EWCP: How to Apply EWCP loans are submitted by the local Lender to the appropriate USEAC. The application is EIB-SBA Form 84-1, a joint application used by SBA and Ex-Im Bank The USEAC prepares the authorization and loan officer report for approval by Loan Guaranty Processing Center (LGPC). Citrus Heights 7(a) LGPC forwards signed documents to the lender. Some lenders have delegated or PLP authority

SBA USEAC Field Structure

U.S. Small Business Administration Loan Programs for Exporters Export Express—to $500,000 International Trade Loan—to $5 million Export Working Capital--to $5 million Please Use Them! USEAC: or Contact: