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October 13, 2021

SBA Export Loans: How to Qualify and Use Each Program

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Fora Financial

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Luckily, The Small Business Administration (SBA) has created several loan programs to help exporters get financing and provides a loan guarantee of up to 90 percent. This group of loans is known as SBA Export Loans. There are three different loans that fall into this category:
  • Export Express
  • Export Working Capital Program (EWCP)
  • International Trade Loan Program
Like other SBA loans, export loans work in conjunction with a traditional lender and the SBA. These SBA personnel are called SBA Senior International Credit Officers and are in U.S. Export Assistance Centers across the United States. In this post, we’ll discuss what each SBA export loan program is used for, what the qualifications are, and how the application process works.

What Are the Different Export Loan Programs?

Each export loan was created to finance specific export-related activities The following provides a summary of each SBA Export Loan. If you own an export business, you should compare each of these loan options prior to applying.

SBA Export Express Loan

  • Provides cash advances for exporters.
  • Offers the broadest range of usages.
  • Simplest of the three export loan programs.
  • 90 percent guarantees on loans up to $350,000 and 50 percent guarantees on loans up to $500,000.
  • You can still apply for regular SBA loans.
  • Fast application process and response (some loans approved within 36 hours).

SBA Export Working Capital Program (EWCP)

  • Provides working capital for fulfilling export orders.
  • 90 percent guarantees on loans up to $5,000,000
  • Best for business owners that need financing to maintain operations during long payment cycles.
  • Expect quick processing times
  • Repayment terms range from 12 months or less to 3 years. Typically, lines credit and term loans will be within the 12 months or less range.

SBA International Trade Loan Program (ITLP)

  • Described as “positioning the firm for export.”
  • Like 7(a) loans, but with a 90 percent guarantee
  • 90 percent guarantees on loans up to $5,000,000
  • Easiest to qualify for
  • Great as an initial export loan
Regarding the ITLP and positioning, this means the loan is used to help position a business as a leading exporter and improve overall U.S. export sales. Apply-For-SBA-Export-Loan

What Are Export Loan Qualifications?

To get an SBA Export Loan, a business must qualify as a small business. There are two criteria that must be met to be categorized as a “small business,” according to the SBA:
  • Tangible net worth of $15 million dollars or less.
  • Net income after taxes (not including carryover losses) for the last two years of $5 million dollars or less.
Because there are different qualifications for each type of loan, we’ll list them individually:

Export Express Loan Program

  • Expanding into new or existing export markets.
  • Operating business for last 12 months.
  • Demonstrate proceeds will be used to support business’ export activity.

Export Working Capital Loan Program

  • Meet SBA 7(a) eligibility and size standards
  • A waiver is available for the 12-month business operation requirement if the applicant can demonstrate export expertise and business experience.
  • Personal guarantee of owners (at least 20 percent ownership).

International Trade Loan Program

  • Can help grow existing export markets or create new ones.
  • Or, your business has been affected by imports, and you can show how the loan will benefit your competitive position.
In addition to qualifications, there are use restrictions for each loan.

How Can Export Loans Be Used?

The SBA Export Loans must be used for the following expenses:

Export Express

  • Export financing
  • Development of new international markets
  • International trade shows, equipment or real estate

Export Working Capital Program (EWCP)

  • Working capital related to exporting
  • Finance foreign accounts receivable
  • Purchase of goods or services for export

International Trade Loan Program

  • Equipment
  • Real estate,
  • Refinancing
  • Permanent working capital

How to Apply for SBA Export Loans:

The SBA Export Loan application process follows nearly the same process as non-SBA Export Loans. Businesses apply with a participating lender, who will forward the applicant’s request to the SBA. From there, the SBA will determine if the applicant is eligible for the specific Export Loan program. The application process can be broken down into four steps:
  1. Apply to participating lender
  2. Submit application package and the SBA borrower information form to lender
  3. Upon approval, lender submits eligibility information to the SBA
  4. The SBA reviews loan for final approval
For Export Express Loans, it’s important to note that the lender must submit the Supplemental Export Express Lender Agreement to the SBA. Verify this with your lender when they are submitting paperwork to the SBA. New call-to-action

Conclusion: Consider SBA Export Loan Options

Small businesses may believe that exporting of products is only for big companies; however, that simply isn’t the case. These loan programs are tailored to small businesses, and the SBA wants to help small businesses grow their exports by expanding in existing markets or creating new ones. With SBA wanting to see U.S. exports grow through small business, these loans could be worth pursuing. Editor’s Note: This post was updated for accuracy and comprehensiveness in October 2021.