By Patrick Hayes, U.S. Small Business Administration
As a small business owner, you may hear the buzz of World Trade Month and be compelled to explore international markets. The fact that 96% of the world’s population and more than 70% of the world’s purchasing power is outside of the United States speaks to you. Beyond the plain insights of these statistics, you have also seen firsthand developments in your own industry where your competitors are increasingly going overseas and where industry innovations have international undertones. You know that in order to continue to grow and thrive, international markets are part of your future.
But you may also wonder if your business is large enough to compete in the international marketplace. Rest assured that small U.S. businesses do in fact export. Over 98% of all US exporters are considered small by SBA size standards. Additionally 70% of all US exporters have less than 20 employees. Small businesses can and do compete in the international marketplace.
Before deciding to compete internationally, you know that this expansion, like any other expansion, will cost money. How will you be able to pay for this growth? The US Small Business Administration (SBA) has established a loan program designed to meet the specific needs of small businesses trying to grow their international markets – Export Express.
Export Express is a streamlined program that allows small businesses to borrow up to $500,000 from their local participating bank with the support of an SBA guarantee. The loan funds can be used for virtually any cost a small business may incur while growing internationally. One of the most appealing aspects of the Export Express program is the streamlined approval process. Banks that participate in the Export Express program have been delegated by SBA to process the eligibility and credit decision without SBA review. What does that mean for you the small business owner? Faster approvals – the SBA provides the bank with an approval within 24 hours of the bank’s request.
Export Express funds can be used for virtually anything that will help your small business enter or grow an export market. Let’s say that you have worked with your local Trade Specialist of the U.S. Commercial Service and have identified the perfect international trade show for your business to exhibit at to start identifying foreign partners – Export Express funds can be used to cover this cost. Perhaps your business is very technical in nature and your brochures, user manuals and website will need to be translated in order to be successful overseas – Export Express funds can also be used for this purpose.
Export Express funds can be used for virtually anything that will help your small business enter or grow an export market. Export Express Loan proceeds may be used to purchase new equipment necessary to enter into international markets, provide working capital for specific export transactions, support standby letters of credit for export purposes, provide a general revolving line of credit or any other financing that will help your business to start or grow exports.
Patrick Hayes is Regional Export Finance Manager at the Cleveland US Export Assistance Center and works with banks and small businesses throughout Ohio, Western New York and Western Pennsylvania. He can be reached at 216-522-4731 or Patrick.Hayes@SBA.gov