Key to Successful Exporting? Money, Money, Money Plus a New SBA Loan Program

Key to Successful Exporting?
Money, Money, Money Plus
a New SBA Loan Program

Is it time to consider growing your business by exporting your product or services? Could be! Some of Small Business Bytes readers have found themselves shipping to places where they never expected to find customers. Why? The Internet receives the chief credit. If their site is on a search engine, their business can be found easily and visited from anywhere.

I have heard about people getting email from potential customers who do not follow up for weeks. Why? They placed the email from an Internet café while on a trip to a highly populated area and then returned to area without phone service or electricity. Eventually, they have been able to do business. The product has been shipped, the seller paid and the goods delivered to the buyer.

Although small businesses are 97% of the exporters from the U.S. to the rest of the world, the opportunities for doing global business are getting bigger for everyone. There are still some problems in going global. The mechanics are different. You have to find a way to let your customers know about your goods or services and be able to order them. Each of you has risks in the transaction. What if the goods are not as advertised? What if the payment is not valid?

Then both of you have to find a system of delivery and payment that you can trust in finishing the transaction. That can get pretty complicated with letters of credit, bankers acceptances and other holdovers from 18th century banking. Simple credit cards can work best but not everyone has equal access to our favorite Visa, MasterCard, American Express, etc. Another option is Paypal, (http://www.paypal.com/) which can now be used in the U.S. and the following countries:

Australia, Denmark, Israel, New Zealand, South Korea, Austria, France, Italy, Norway, Spain, Belgium, Germany, Japan, Portugal, Sweden, Brazil, Hong Kong, Mexico, Singapore, Switzerland, Canada, Ireland, Netherlands, South Africa, United Kingdom

As you can see, there are far more countries that currently do not have Paypal services than those that do. Paypal continues to expand their services. Merchants pay for PayPal. Consumers do not pay for these transactions. It is used extensively by small businesses and can be accessed via computer or even from Web enabled mobile phones.

Another big boost for small business exporting comes from the U.S. Small Business Administration. The SBA has developed numerous trade partners across the globe including Africa, Argentina, Canada, Egypt, Ireland, Mexico and Turkey to facilitate business linkages and promote strategic business alliances with small United States companies.

Now, the SBA is helping your local banker to provide you export assistance that only a few "big" banks used to offer. Available nationwide, SBA Export Express is a streamlined small loan program that allows participating lenders to use their own forms, procedures and analyses, with a loan application turn-around of 36 hours. SBA Export Express combines those streamlined procedures with a high guaranty percentage to encourage lenders to make loans to small business exporters that otherwise could not get financing.

The SBA Export Express Pilot Loan Program can be used by small businesses, including export trading companies and export management companies, to develop foreign markets. Businesses can use the program to finance their participation in foreign trade shows and trade missions, to translate their product literature for use in foreign markets, to finance specific export orders or to finance working capitol and fixed asset loans, which will allow them to export their products to foreign markets.

Export Express features:

An SBA loan guaranty of up to 80 percent on a loan of $100,000 or less and 75 percent on larger loans, with the maximum loan amount of $150,000.

Enhanced ability to export by increased access to capital.

Private sector lenders that take a more aggressive role in developing the small business export community

An expedited loan review and approval process for small business exporters.

Technical assistance, provided by SBA's U.S. Export Assistance Centers (USEACs), in cooperation with SBA's network of resource partners, including the Small Business Development Centers (SBDCs), Service Corps of Retired Executives (SCORE) and other state and local export service providers.

Loan proceeds may be used to finance standby letters of credit, revolving lines of credit for export purposes and term loans that are used to finance expansions, equipment purchases, inventory or real estate acquisitions.

Small business owners and entrepreneurs who want to know more about applying for a loan under the program should contact the nearest SBA field office.

For additional information on SBA Export Express and other export finance programs, visit the SBA Web site at http://www.sba.gov/. To locate the SBA field office nearest to you, visit online at http://www.sba.gov/regions/states.html

-Cynthia Nemeth-Johannes