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It doesn't matter whether it's as close as Windsor or as far as Hong Kong or Zimbabwe, the Michigan District Export Council has someone who's been there and done that.  We encourage you to give us a try.

EXPORT TRADE FINANCE RESOURCES

U.S. Small Business Administration (SBA) 

Contact:

 

John O'Gara

International Trade Finance Specialist

Detroit US Export Assistance Center

2111 W. Fort St., Suite 2220

Detroit, MI 48226

PH: 313-226-3670

FAX: 313-226-3657

EMail:  John.O'Gara@mail.doc.gov 

 

SBA Export Express

SBA Export Express helps small businesses that have exporting potential, but need funds to buy or produce goods, and/or to provide services, for export. Loan proceeds may be used for most business purposes, including expansion, equipment purchases, working capital, inventory or real estate acquisitions.

Who Can Use this Program?

SBA Export Express loans are available to persons who meet the normal requirements for an SBA business loan guaranty. Loan applicants must also –

• demonstrate that the loan proceeds will enable them to enter a new export market or expand an existing export market, and

• have been in business operation, though not necessarily in exporting, for at least 12 months.

How Does the Program Work?

Any lender that is authorized to participate in the SBA Express loan program may participate in SBA Export Express. A list of authorized lenders can be obtained by either contacting the SBA representative in the U.S. Export Assistance Center nearest you (a list of centers is on the back of this brochure). SBA Export Express lenders use streamlined and expedited loan review and approval procedures to process SBA guaranteed loans. The lender uses its own loan analyses, loan procedures and loan documentation. Completed loan applications are submitted for approval to the SBA’s processing center in Sacramento, California. The SBA provides the lender with a response, typically within 36 hours.

For loans up to $150,000, SBA offers the Lender a guaranty of 85%, for loans over $150,000 up to the program maximum of $250,000, SBA offers the Lender a guaranty of 75%.

INTERNATIONAL TRADE LOAN PROGRAM

Description----The International Trade Loan Program provides financing for small businesses that are engaged or preparing to engage In international trade or that have been adversely affected by competition from exports. Loan proceeds can be used to purchase, build or upgrade facilities, machinery or equipment used for producing goods or services in the United States, and for permanent working capital to assist in such efforts.

Who Makes the Loan?--Selected lenders.

Who Is Eligible?--Small businesses planning to export or to significantly increase existing exports; small businesses adversely affected by competition from imports.

Loan Amount---No limit, but SBA cannot guarantee more than $1.25 million.

Loan Maturity----25 years for facilities, 10 years for equipment.

Other Criteria--Lender must hold a first lien on assets being financed.

Other business assets, personal guarantees by principals and/or personal assets may be required as security on the loan. Only collateral located in the United States is acceptable.

EXPORT WORKING CAPITAL PROGRAM

Description Export Working Capital Program provides loan guarantees for loans used to: finance labor and material for manufactured goods for export; purchase goods or services for export; or finance accounts receivable generated from export sales.

Who Makes the Loan?--Selected lenders.

Who Is Eligible?--Small businesses engaged in exporting.

Loan Amount--No limit, but SBA cannot guarantee more than 90 percent of loans up to $1.1 million, or $1,000,000 (whichever is less). When combined with an international trade loan, the amount can be up to $1.25 million. Loan requests over $1.1 are processed through Eximbank (see below).

Loan Maturity---Maximum of 18 months for a single transaction. If the loan is for a revolving line of credit, the maturity is typically one year and can be reissued two times for a maximum maturity of three years.

Other Criteria---Collateral may include export inventory, foreign receivables, and assignments of contract and letter of credit proceeds. Personal guarantees usually are required.

U.S. Department of Commerce

(202) 482-2000 or (800) USATRADE

14th St. and Constitution Avenue, NW, Washington, DC 20230

World Wide Web http://www.doc.gov/  or http://www.export.gov. 

The U.S. Department of Commerce's Commercial Service is one of the lead agencies providing export services through U.S. Export Assistance Centers (USEAC). USEACs are federal export assistance offices which streamline export marketing and financial assistance by integrating in one location the services of the U.S. Commercial Service, EXIMBANK, and the SBA. Services are targeted to export-ready firms.

There are currently 19 lead USEACs:

Export-Import Bank (EXIMBANK)

(202) 565-3900

811 Vermont Avenue, NW, Washington, DC 20571

World Wide Web http://www.exim.gov 

EXIMBANK is an independent federal government agency that provides export financing to large and small businesses and to potential exporters who need working-capital loans from commercial lenders. EXIMBANK financial assistance is provided in the form of direct loans, insurance, and loan guarantees for lenders to foreign buyers of goods and services produced in the United States. EXIMBANK offers the following export financing programs:

• Working Capital Guarantee Program for commercial loans to U.S. exporters
• Direct loans to foreign buyers
• Loan guarantees for lenders to foreign buyers of U.S. products
• Special financing programs for environmental exports Export credit insurance for commercial and political risk

For more information about specific EXIMBANK programs, call the EXIMBANK Financing Hotline at (800) 565-3946.

Overseas Private Investment Corporation

(202) 336-8799

1100 New York Avenue, NW, Washington, DC 20528

World Wide Web http://www.opic.gov 

The Overseas Private Investment Corporation (OPIC) is a self-sustaining federal agency that helps U.S. businesses invest in almost 140 developing nations and emerging markets. OPIC provides medium and long-term loans and political risk insurance. Companies with annual revenues less than $250 million qualify for OPIC's special small business programs. Small business programs include direct loans with a minimum loan size of $250,000 and streamlined loan procedures. The Contractor's Guarantee Program helps small contractors and construction companies obtain financing for projects overseas. OPIC will guarantee up to 75 percent of a standby letter of credit or other form of performance or advance-payment guarantee issued on behalf of a contractor. OPIC's small business services also include "quick cover" insurance with a two-week turnaround to small businesses investing in certain sectors. OPIC offers a simplified insurance application for small businesses and a streamlined contract which helps reduce premium costs. For more information on OPIC programs, call the OPIC Small Business Hotline at (202) 336-8799.

Alternative Financing

What is factoring? - (Receivable Base Financing)

Simply put...factoring turns your receivables into cash today, instead waiting to be paid at a future date.  Factoring is the time honored and increasingly utilized financial tool that speeds client cash flow and helps avoid the problems that slow-paying customers can create for fast-growing companies. Factoring provides quick and convenient funding to growing companies who need capital to expand their business. To do this, factors purchase your credit-worthy accounts receivable at a small discount and fund you with immediate cash.

Factoring is not a loan. There is no debt repayment, no compromise to your balance sheet, no long-term agreements or delays associated with other methods of raising capital. Factoring allows you to use your own hard earned assets to create cash for the growth needs of your company today.

What is factoring? Buying invoices from a business at a discount.

What is Forfaiting?

Forfaiting is the purchase of an exporter’s trade receivables at a discount to face value "without recourse" to the exporter. This discount will imply a fixed rate of interest to the maturity of the importer’s obligation. Once the goods have been shipped and the necessary satisfactory documentation obtained (such as shipping documents and commercial invoices), Nedbank is able to purchase the trade receivables (i.e. the importer’s debt obligations) and so assume the responsibility for the debts. Thus the exporter is free of credit, transfer, and political risks, and can then concentrate all his efforts on new business.

What is Barter?

Barter allows you to buy what you need and pay for it with otherwise unsold products and services --- without the use of cash. A leading barter company executive, when asked "How big is the barter business?", responded by saying "No one really knows how big it is because companies won't talk about it." "They're not advertising it," he said. "They don't want their competitors to know about bartering." "Whatever it is --surplus or seasonal inventory, a discontinued line, canceled orders, store returns-- you can trade it, rather than liquidate it, and recover the value that has been lost."

Date Updated: March 27, 2007