DCVAWVMDDE Export Solutions Group Office of International Trade williamhoucksbagov 1 2025574063 Export Loan Guarantee Programs SBA Ex Im Bank US Commercial Service USCS ID: 549551
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Bill Houck, Regional Manager(DC,VA,WV,MD,DE)Export Solutions GroupOffice of International Tradewilliam.houck@sba.gov+1 202-557-4063Export Loan Guarantee ProgramsSlide2
SBA
Ex-
Im
Bank
US
Commercial
Service(USCS)
US Export Assistance Center (USEAC)
USCS & State EDO- Market analysisMatch makingBuyer due diligenceSBAExport activity working capitalTransaction working capitalFixed asset and real estate term loans Ex-Im BankExport working capitalCredit insuranceSlide3
US Export Assistance Centerwww.trade.gov and www.export.govStart: US Commercial Service and state economic development assists in originating export sales
ToFinish: SBA and Ex-Im assist in financing export sales, turning purchase orders into a completed export saleSlide4
Developing an Export Business Plan
www.sba.gov/exportbusinessplanner A downloadable tool to save and customize How
to determine your export readiness
Training
and counseling information
Worksheets for global market research Financing information and options Customizable Export Business Plan and Marketing Plan templates Helpful resources for exporters Glossary of Export Terms And more!
SBA Export Business PlannerSlide5
Background: Incoterms
The International Chamber of Commerce ("ICC") created “INCOTERMS” in 1936 to uniform global trade. The ICC periodically revises publications of INCOTERMS. The latest version was released in January 2011.
Set of uniform terms applicable to all the various types of purchase agreements and shipping agreements, which also serve as a “global language”.
Defines the responsibility of the Buyer and the Seller - conveys “risk” and “responsibility”; which party is to pay which charges, and where delivery takes place.
Determines when title of the goods passes from the seller to buyerSlide6
Movement of Goods: Scope of Seller and Buyer Responsibilities
(Ex Works)
(Free Alongside Ship)
(Free Carrier)
(Free On Board)
(Cost & Freight)
(Cost, Ins, Freight)
(Carriage Paid To)
(Carriage & Ins. Paid)(Delivered at Frontier)(Delivered Ex Ship)
(Delivered Duty Unpaid) (Delivered Ex Quay
(Delivered Duty Paid)Slide7
Costly for importer, most secure for export
- Cash in advance
- Letter of Credit
Middle of the road
-Documentary collection Costly/risky for Exporter, most secure for importer - Open accountExport Terms of SalesSlide8
Letters of creditSlide9
Protect
your open account
terms from none payment
Improve
cash flow
Increase orders
Simple application processOnly insure buyers you wantQualify buyers before you go on trade missions and start negotiationsNominal premium costNo deductible on small business policies
Offering open account terms must be part of your sales strategy
Export Credit InsuranceSlide10
To qualify: SBA defined small business with $7.5 mm or less in average export credit sales for 3 years, 95% commercial and political risk
Small
Business Express Policy
(
20 or less foreign buyers
) -select buyer coverage up to $300,000 per buyer
b.
Small Business multi-buyer policyNo deductible, premiums from $0.49to $1.35 per 100 invoice value depending on terms of sale (1 to 180 days open account
Small Business Export Credit InsuranceSlide11
SBA Export Financing Programs
Export Express
90% guarantee for amounts up to $350,000 (for up to 7 years)
75% guarantee for amounts between $350,000 and $500,000 (for up to 7 years)
Lender uses its own loan approval process and documents
For financing of inventory, accounts receivable and export development activities
Export Working Capital Program90% guarantee for amounts up to $5,000,000Use of funds for purchase order financing, accounts receivable and inventory financingInternational Trade Loan Program90% guarantee for amounts up to $5,000,000
For working capital term loans for financing and refinancing of fixed assets used for exporting (loan tenures up to 10 years for plant & equipment and 25 years for real estate)
Developing an Export Business Planwww.sba.gov/exportbusinessplanner Slide12
Technical Information for the bank
AR advance rate is 80%
(
90% for L/Cs or insured AR)
Inventory advance rate is 75%
Indirect export transactions are eligible
Advances against purchase orders allowedNo minimum underwriting ratiosMilitary products are eligibleRefinancing is allowedABL and similar monitoring fees allowed under EWCPRobust secondary market (premiums can exceed 10%)Slide13
Bill Houck, Regional Manager(DC ,VA, WV, MD, DE)Export Solutions GroupOffice of International Tradewilliam.houck@sba.gov+1 202-557-4063