SBA SBA SBA SBA

SBA EXPORT EXPORT FINANCE FINANCE

PROGRAMSPROGRAMS

SBA EXPORT EXPORT FINANCE FINANCE

PROGRAMSPROGRAMS

U.S. SMALL BUSINESS ADMINISTRATIONU.S. SMALL BUSINESS ADMINISTRATION Approximately 94% of all US businesses are Approximately 94% of all US businesses are

classified as “small businesses’. [NAICS]classified as “small businesses’. [NAICS] SBA assists small businesses by guaranteeing SBA assists small businesses by guaranteeing

bank loans up to 90% for export financing. SBA bank loans up to 90% for export financing. SBA also provides complimentary loan application also provides complimentary loan application assistance and technical assistance.assistance and technical assistance.

Houston’s Assets: “Energy Capital of the Houston’s Assets: “Energy Capital of the World”, Texas Medical Center, NASA’s Space World”, Texas Medical Center, NASA’s Space Center, the Port of Houston [#1 US port in Center, the Port of Houston [#1 US port in foreign tonnage], the Houston Airport etc. have foreign tonnage], the Houston Airport etc. have created a ripple effect promoting global markets created a ripple effect promoting global markets for area businesses. for area businesses.

1] ] INTERNATIONAL TRADEINTERNATIONAL TRADE (IT) (IT)

2] ] EXPORT WORKING EXPORT WORKING CAPITALCAPITAL (EWC) (EWC)

3] ] EXPORTEXPORTEXPRESSEXPRESS (E(EEE))

THREE EXPORT LOAN PROGRAMS:THREE EXPORT LOAN PROGRAMS: http://www.sba.gov/oit

S.B.A. offers 75% S.B.A. offers 75% Guaranty:Guaranty:

1] INTERNATIONAL TRADE 1] INTERNATIONAL TRADE

LOAN GUARANTY (IT 75%).LOAN GUARANTY (IT 75%).

Loan for Business-Related Real Estate, Loan for Business-Related Real Estate,

Equipment, and Working Capital Equipment, and Working Capital [COLLATERAL MUST BE LOCATED IN THE U.S.][COLLATERAL MUST BE LOCATED IN THE U.S.]

INTERNATIONAL TRADE PROGRAMINTERNATIONAL TRADE PROGRAM (IT (IT 75%):75%):

For a business: 1] engaged or preparing to engage in export For a business: 1] engaged or preparing to engage in export oror 2] 2] adversely affected by imports.adversely affected by imports.

Loan Proceeds: To purchase, construct, renovate fixed assets: such as Loan Proceeds: To purchase, construct, renovate fixed assets: such as office building, factory, warehouse, export storage, and/or equipment.office building, factory, warehouse, export storage, and/or equipment.

Not for refinancing or debt payment. Not for refinancing or debt payment. Unique Requirement: Applicant must provide a business plan Unique Requirement: Applicant must provide a business plan

supporting projected export sales.supporting projected export sales.

INTERNATIONAL TRADE INTERNATIONAL TRADE PROGRAMPROGRAM (IT 75%): (IT 75%):

SBA’s maximum SBA’s maximum guarantyguaranty exposure for a fixed exposure for a fixed asset International Trade export loan isasset International Trade export loan is :

$ 1 Million$ 1 Million for an International Trade bank loan. for an International Trade bank loan. The maximum allowable loan amount is $ 2MM. The maximum allowable loan amount is $ 2MM.

SBA loan guaranty is up to 75%. SBA loan guaranty is up to 75%. Maximum loan term may be up to 25 years for Maximum loan term may be up to 25 years for

real estate and 10 years for equipment.real estate and 10 years for equipment. All fees are controlled by SBA Regulations.All fees are controlled by SBA Regulations. Collateral securing the loan must be located and Collateral securing the loan must be located and

used in the U.S.used in the U.S.

U.S.S.B.A.U.S.S.B.A.

2] 2] EXPORT WORKING EXPORT WORKING CAPITAL LOAN GUARANTY CAPITAL LOAN GUARANTY PROGRAMPROGRAM (EWC 90%). (EWC 90%).

Collateral items purchased with loan Collateral items purchased with loan funds are exported out of the U.S.funds are exported out of the U.S.

EXPORT WORKING CAPITAL PROGRAMEXPORT WORKING CAPITAL PROGRAM (EWC 90%): (EWC 90%):The The #1#1 need of exporters: need of exporters:FINANCINGFINANCING..EWC relieves bankers from risk exposure: SBA may guaranty a bank loan up to $1,000,000.00 or 90% of the EWC relieves bankers from risk exposure: SBA may guaranty a bank loan up to $1,000,000.00 or 90% of the

loan amount, whichever is less. Maximum bank loan amount for this program is also $ 2 Million .loan amount, whichever is less. Maximum bank loan amount for this program is also $ 2 Million .SBA can help exporters cash-in on the global market by providing a Government guaranty for a bank loan.SBA can help exporters cash-in on the global market by providing a Government guaranty for a bank loan.

EWC (90%): What is it?EWC (90%): What is it?

An Export Loan Program which:An Export Loan Program which:

Provides short-term loan or a revolving Provides short-term loan or a revolving line of credit financing to exporters.line of credit financing to exporters.

Encourages lenders to make export Encourages lenders to make export loans almost risk free. loans almost risk free.

EX-IM BANK COUNTRY EX-IM BANK COUNTRY LIMITATION SCHEDULE: LIMITATION SCHEDULE:

1) 1) Schedule highlights those foreign markets Schedule highlights those foreign markets the US Govt. supports or restricts.the US Govt. supports or restricts.

www.exim.gov/country/cntlimit.html www.exim.gov/country/cntlimit.html

2) 2) Refer to Schedule for any export Refer to Schedule for any export

restrictions on buyer’s country.restrictions on buyer’s country.

3) 3) Restrictions imposed for Political, Restrictions imposed for Political, Economic or Legislative reasons.Economic or Legislative reasons.

EX-IM BANK COUNTRY EX-IM BANK COUNTRY LIMITATION SCHEDULE: LIMITATION SCHEDULE:

1) 1) Schedule highlights those foreign markets Schedule highlights those foreign markets the US Govt. supports or restricts.the US Govt. supports or restricts.

www.exim.gov/country/cntlimit.html www.exim.gov/country/cntlimit.html

2) 2) Refer to Schedule for any export Refer to Schedule for any export

restrictions on buyer’s country.restrictions on buyer’s country.

3) 3) Restrictions imposed for Political, Restrictions imposed for Political, Economic or Legislative reasons.Economic or Legislative reasons.

PrePre--shipment working capital: To purchase shipment working capital: To purchase raw materials for manufacturing, or raw materials for manufacturing, or finished goods for direct or indirect export.finished goods for direct or indirect export.

Indirect ExportsIndirect Exports: Goods sold to another U.S. : Goods sold to another U.S. company, however, final destination of goods is company, however, final destination of goods is overseas.overseas.

EWC (90%): What does it cover?EWC (90%): What does it cover?

PostPost--shipment exposure: extends the loan shipment exposure: extends the loan payment term allowing the seller time to payment term allowing the seller time to receive sales proceeds from the buyer receive sales proceeds from the buyer and/or to complete post shipment and/or to complete post shipment operations, such as installation or final operations, such as installation or final assembly, performed by US employee of assembly, performed by US employee of seller, in the destination country.seller, in the destination country.

EWC (90%): What does it cover?EWC (90%): What does it cover?

Combination of pre- and post- shipmentCombination of pre- and post- shipment financing [ for example: manufacture financing [ for example: manufacture modular housing, allowing for time to modular housing, allowing for time to assemble overseas, and payment from assemble overseas, and payment from buyer].buyer].

EWC (90%): What does it cover?EWC (90%): What does it cover?

EWC (90%): what does it EWC (90%): what does it

cover ?cover ? (continued) (continued) Services on a Existing ContractServices on a Existing Contract: Foreign : Foreign

contract for construction, engineering, contract for construction, engineering, architectural etc. [loan proceeds for inventory architectural etc. [loan proceeds for inventory required to perform on contract, travel, US required to perform on contract, travel, US payroll expenses etc.].payroll expenses etc.].

Standby Letter of CreditStandby Letter of Credit: Bank guarantees the : Bank guarantees the work performance overseas of the U.S. work performance overseas of the U.S. exporter [similar to a Performance Bond]. exporter [similar to a Performance Bond].

EWC: Who is eligible?EWC: Who is eligible? The exporter must:The exporter must:

Must be as U.S. citizen or have a valid “Green Must be as U.S. citizen or have a valid “Green Card” [must be verified with INS].Card” [must be verified with INS].

Meet SBA’s industry size-standards .Meet SBA’s industry size-standards . Have been in business for at least 12 months [not Have been in business for at least 12 months [not

necessarily in exporting].necessarily in exporting]. IRS tax returns must be verified.IRS tax returns must be verified.

By-Employees:By-Employees: SIZE STANDARDSSIZE STANDARDS

Manufacturing Manufacturing ---- 500500 to 1500o 1500 employees or less. employees or less.

Mining ---- Mining ---- 500 500 employees or less. employees or less.

Wholesale Trade ---- Wholesale Trade ---- 100100 employees or less. employees or less.

By-Annual Gross Receipts:By-Annual Gross Receipts:

Gen. & Heavy ConstructionGen. & Heavy Construction--------------$ 27. 5--------------$ 27. 5 million million

Special Trade Special Trade ----------------------------$ 11.5----------------------------$ 11.5 million million

Retail Trade Retail Trade -------------------$ 5. to $ 21-------------------$ 5. to $ 21 . million. million

Real Estate Real Estate -------------------$ 5. to $ 18.5.-------------------$ 5. to $ 18.5. million million

ServicesServices ---------------- $ 2. 5 to $ 21.5---------------- $ 2. 5 to $ 21.5 million million

AgricultureAgriculture -------------- $ 0.750 to $ 9.-------------- $ 0.750 to $ 9. million million

North American Industry Classification System (NAICS).North American Industry Classification System (NAICS).

EWC: What collateral will be EWC: What collateral will be required to support the loan?required to support the loan?

Assignment of proceeds from one or more:Assignment of proceeds from one or more: Confirmed Letter of Credit.Confirmed Letter of Credit.

Foreign receivables.Foreign receivables.

Service contract.Service contract.

EXIM export credit insurance.EXIM export credit insurance.Fixed assets ( usually to secure long-term loans [1 Fixed assets ( usually to secure long-term loans [1

year or more] or weak credit). year or more] or weak credit). Personal guarantees by owners:( owners with 20% or Personal guarantees by owners:( owners with 20% or

more ownership in business).more ownership in business).

Is the dealIs the deal “DO-ABLE”“DO-ABLE” ? ?How reliable is theHow reliable is the repayment source?repayment source?Can the exporterCan the exporter perform ? Does the perform ? Does the

exporter have the expertise?exporter have the expertise?

MAJOR DIFFERENCE:MAJOR DIFFERENCE:

EWC: What Does SBA Look For?EWC: What Does SBA Look For?The Credit FocusThe Credit Focus: The transaction,The transaction,

NOT the business. NOT the business.

EWC: SBA Fees & Interest RatesEWC: SBA Fees & Interest Rates SBA Guarantee FeesSBA Guarantee Fees:: Loan term of 12 months or less: 0.25% of guaranteed Loan term of 12 months or less: 0.25% of guaranteed

loan amount.loan amount. Loan term over 12 months: regular 7a fee applies Loan term over 12 months: regular 7a fee applies

(between 1%-4%).(between 1%-4%).

Interest Rates & Lender Fees:Interest Rates & Lender Fees:Negotiable between lender andNegotiable between lender and

customer: not controlled by SBA.customer: not controlled by SBA.

3] 3] EXPORTEXPORTEXPRESS EXPRESS (E(EE 75-85%)E 75-85%) • Maximum loan amount : $ 250,000.Maximum loan amount : $ 250,000.• SBA guaranty up to 85% for $150,000 or less. For loans from SBA guaranty up to 85% for $150,000 or less. For loans from

$150,000 to $250,000, SBA guaranty 75%.$150,000 to $250,000, SBA guaranty 75%.• Unique program where loan funds may be used to market your Unique program where loan funds may be used to market your

goods/services overseas. In addition, the purchase of fixed assets goods/services overseas. In addition, the purchase of fixed assets or working capital.or working capital.

• Only SBA Export program where Lender uses its own loan Only SBA Export program where Lender uses its own loan application, credit, and processing procedures. Only one SBA application, credit, and processing procedures. Only one SBA documents is required.documents is required.

• No criminal activity in personal history.No criminal activity in personal history.

Purchase of American-made Purchase of American-made equipment and products ”to the equipment and products ”to the greatest extent practicable”.greatest extent practicable”.

Limited sales to foreign military Limited sales to foreign military (U.S. Munitions List prohibited).(U.S. Munitions List prohibited).

SBA follows EXIM Country SBA follows EXIM Country Limitation Schedule.Limitation Schedule.

EWCP: Some limitsEWCP: Some limits

Helpful Websites:Helpful Websites:

Basic Guide toBasic Guide to ExportExport::http://www.export.gov; http://www.export.gov; http://www.tradenet.gov;http://www.ita.gov/tichttp://www.tradenet.gov;http://www.ita.gov/ticMarket research:Market research: http://www.usatrade.gov http://www.usatrade.govMarket Dev.&Market Dev.& LinksLinks:http://www.usatrade.gov :http://www.usatrade.gov http://www.buyUSA.com;http://www.buyUSA.com;Europages BusinessEuropages Businessdirectorydirectory:: http://www.europages.com; http://www.europages.com; TradeTradeShows WorldwideShows Worldwide:: http://www.tscentral.com http://www.tscentral.comExportExport RegulationsRegulations::http://www.bxa.doc.gov;http://www.bxa.doc.gov;ATA carnet:ATA carnet: http://www.usib.org. http://www.usib.org.

E. L. A. N.E. L. A. N.Export Legal Assistance NetworkExport Legal Assistance Network (E.L.A.N.) (E.L.A.N.)

http://www.fita.org/elanhttp://www.fita.org/elanU. S. Small Business Administration and U. S. Small Business Administration and

Federal Bar Association.Federal Bar Association. Initial consultation is Initial consultation is FREE.FREE. Contact: Contact: Sameer Mohan Esq.Sameer Mohan Esq.

or Jamie Joiner Esq.or Jamie Joiner Esq.

Baker & Hostetler LLPBaker & Hostetler LLP

(713) 646-1314(713) 646-1314

SBA-Sponsored SBA-Sponsored FREEFREE Export Resource AssistanceExport Resource Assistance

SBA International Trade Officer:SBA International Trade Officer: Najla Tanous (713) Najla Tanous (713) 773-6522/23: To finance existing export orders.773-6522/23: To finance existing export orders.

University of Houston S.B.D.C.University of Houston S.B.D.C. Roberta SkeboRoberta Skebo

(713) 752-8400 : Free loan packaging for an SBA (713) 752-8400 : Free loan packaging for an SBA export loan application.export loan application.

SCORE SCORE - Business Information Center (BIC),- Business Information Center (BIC),

(713) 773-6549: Start-up information to export.(713) 773-6549: Start-up information to export. S.B.D.C. International Trade Center S.B.D.C. International Trade Center Carlos Carlos

Lopez, Director, for technical assistance.Lopez, Director, for technical assistance.