Export Express 

SBA Export Express helps small businesses develop or expand their export markets. The program provides exporters and lenders a streamlined method to obtain SBA-backed financing for loans and lines of credit up to $250,000.

Most banks in the U.S. do not lend against export orders, export receivables or letters of credit.  SBA temporarily provides lenders with up to a 90 percent guaranty on export loans as a credit enhancement to encourage participating banks to make loans that make the necessary export financing available.

Lenders use their own credit decision process and loan documentation. SBA provides an expedited eligibility review and provides a response in less than 24 hours, so exporters get access to funds faster.

How Funds May Be Used
Loan proceeds may be used to finance any export development activity, including:

• Standby letters of credit when required as a bid bond, performance bond or advance payment guarantee
• Participation in a foreign trade show
• Translation of product brochures or catalogs for use in overseas markets
• General lines of credit for export purposes
• Service contracts from buyers located outside the United States
• Transaction-specific financing needs associated with completing actual export orders
• Purchase of real estate and equipment to be used in the production of goods or services for export
• Providing term loans and other financing to enable small business concerns, including export trading companies and export management companies, to develop foreign markets
• Acquisition, construction, renovation, modernization, improvement or expansion of productive facilities or equipment to be used in the United States in the production of goods or services for export

Eligibility 
SBA Export Express loans are available to businesses that meet the normal requirements for an SBA 7(a) business loan guaranty. Financing is available for manufacturers, wholesalers, export trading companies and service exporters.  Loan applicants must demonstrate that the loan proceeds will enable them to enter a new export market or expand an existing export market.  Applicants must have been in business, though not necessarily in exporting, for at least 12 months.

Loan Amount 
The maximum line of credit/loan amount is $250,000. The Recovery Act temporarily provides up to a 90 percent guaranty on Export Express loans. It is anticipated this increased guaranty will last through the end of calendar year 2009, or until the appropriated funds are exhausted, whichever comes first. Normally, the lender receives an 85 percent guaranty for loan amounts up to $150,000 and 75 percent on loan amounts between $150,000 and $250,000.

Loan Maturity 
The maturity of an SBA Export Express term loan is usually 5 to 10 years for working capital, 10 to 15 years for machinery and equipment (not to exceed the useful life of the equipment), and up to 25 years for real estate. The maturity for revolving lines of credit may not exceed 7 years. 

Interest Rate
The SBA does not establish or subsidize interest rates on loans. Interest rates are negotiated between the borrower and the lender, but may never exceed SBA interest rate caps. Rates can either be fixed or variable, and are tied to the prime rate as published in The Wall Street Journal, the one-month LIBOR rate, or the optional peg rate published quarterly in the Federal Register.

SBA Fee
The SBA fee for an Export Express loan with a 12-month maturity or less is ¼ percent (0.25 percent) assessed on the guaranteed portion of the loan. For loan maturities longer than 12 months, the normal guaranty fee is 2 percent on loans up to $150,000 and 3 percent on loans between $150,000 and $250,000. However, the Recovery Act temporarily provides for a guaranty fee elimination on all 7(a) and 504 loans. It is anticipated this elimination will last through calendar year 2009 or until the appropriated funds for this provision are exhausted, whichever comes first.

Collateral 
Lenders follow collateral policies and procedures that the lender has established for its non-SBA-guaranteed loans.

Contact us for more information.

Gustavo A. Viera, CPA