So you run a small business and want to get into exporting or expand your existing export operations. Awesome! Exporting is a great way to access new markets and increase sales. The tricky part can be getting the financing to make it happen. That’s where SBA export loans come in.The Small Business Administration (SBA) offers several export financing programs to help small businesses export their products overseas. These loans provide favorable terms and come with the SBA’s guarantee, making it easier for small businesses to get approved.But before you apply, there are some key things you should know about these loans to make sure you put your best foot forward with your application. Let’s break it down.
Overview of SBA Export Loan Programs
The SBA has three main export loan programs:
- Export Express Loan – Fast turnaround loans up to $500K to enter a new export market or expand in one you already export to.
- Export Working Capital Loan – For short-term working capital and financing export orders. Up to $5 million.
- International Trade Loan – Term loans and lines of credit up to $5 million to expand facilities, acquire equipment, or provide term working capital.
Lenders can offer loans with up to 90% guarantees from the SBA on export loans. This reduces their risk and makes them more likely to approve financing.
To qualify for any of the SBA export loans, you need to meet these basic requirements:
- Be an operating business for at least 12 months (can be waived with export expertise)
- Be considered a small business by SBA size standards
- Have a business need aligned with the loan purpose
- Be of good character
- Have the ability to repay the loan
In addition, for the Export Express loan the proceeds must be used for an export development activity. And for the International Trade loan, international trade must account for a significant portion of your past and/or future sales.
When applying for an SBA export loan, you’ll need to submit documentation commonly required for small business loans, such as:
- Ownership, affiliate, and SBA loan history info
- Business and personal financial statements and tax returns
- Business plan with details on exporting
- Projections of financials and export sales
The process varies slightly depending on the specific loan:Export Express
- Apply directly to an SBA Express Lender
- Lender reviews, approves, and submits application to SBA
- SBA provides decision within 36 hours
Export Working Capital
- Contact local SBA Export Finance Manager to discuss
- Apply through participating lender
- Lender submits application to SBA for review
- SBA decision within 5-10 days
- Same process as Export Working Capital
Reaching out to an SBA Export Finance Manager for guidance can be helpful before formally applying.
Tips for Approval
Follow these tips to strengthen your chances of getting approved:
- Pick the right loan – Choose the program that aligns with your needs.
- Check eligibility – Confirm you meet all requirements.
- Prepare documentation – Have all required paperwork ready.
- Highlight export expertise – If less than 12 months in business, showcase your experience.
- Explain export plan – Clearly detail what you will export and how.
- Be conservative with projections – Forecast realistic export sales.
- Get advising – Consult local SBA offices for guidance.
Benefits of Export Loans
Export loans through the SBA provide great advantages like:
- Favorable terms – Low fees, rates, and down payments.
- Flexibility – Can be used for working capital or fixed assets.
- Expert support – SBA advisors help guide you.
- Funding options – Variety of loan types to fit your needs.
On top of that, the SBA guarantee means less risk for lenders. This expands your lending options beyond conventional business loans.
Alternatives to Consider
If an SBA backed loan isn’t the right fit, some alternatives to look into include:
- Traditional bank export loans
- Community development lender programs
- Export grants and financing programs
- Trade credit and accounts receivable financing
- Peer-to-peer business lending platforms
Shop around to find the best option that matches your exporting needs and budget.
Preparing a solid application is key to getting approved for an SBA export loan. Following these final tips can help:
- Provide realistic projections with clear methodology
- Have sufficient equity invested in your business
- Check your personal and business credit
- Know your operations, cost structure, and exports inside out
- Be ready to fully explain your export plan and strategy
With a well packaged application and some expert guidance along the way, you can get access to the financing you need to take your exports to the next level.The SBA wants to help small businesses export, so take advantage of that through their export loan programs. Just make sure you know what’s required and how the process works. Follow the tips above and you’ll be well on your way to sealing an export loan to grow internationally.