Doing business internationally is good business it can also can tie your money up while goods are in transit. Add to that additional time while the products are being inspected by the customer in country. The can help with the Export Working Capital Program (EWCP).

Under the EWCP, SBA guarantees short-term working capital loans made by participating lenders to exporters.

Loan maturities may be for up to three years with annual renewals. Proceeds can be used only to finance export transactions. Loans can be for single or multiple export transactions. An export transaction is the production and payment associated with a sale of goods or services to a foreign buyer.

In addition to the eligibility criteria applicable to all 7(a) loans, an applicant must be in business for one full year at the time of application, but not necessarily in the exporting business. SBA may waive this requirement if the applicant has sufficient export trade experience or other managerial experience.

Loan proceeds may be used: to acquire inventory; to pay the manufacturing costs of goods for export; to purchase goods or services for export; to support standby letters of credit; for pre-shipment working capital; and for post-shipment foreign accounts receivable financing.

A borrower must give SBA a first security interest sufficient to cover 100 percent of the EWCP loan amount (such as insured accounts receivable or letters of credit). Collateral must be located in the United States, its territories or possessions.

EWCP applicants must submit cash flow projections to support the need for the loan and the ability to repay. After the loan is made, the loan recipient must submit continual progress reports. SBA does not limit the amount of extraordinary servicing fees under the EWCP. SBA does not prescribe the interest rates for the EWCP, but will monitor these rates for reasonableness.

Financing Options: Combination International trade and EWCP Loans

Combination International Trade and EWCP Loans

Borrowers needing both fixed assets and revolving working capital for exporting, can get both an IT and an EWCP loan. When done, the maximum SBA share can be no higher than $1.25 million providing the fixed asset portion is no more than $1.0 million and the non-fixed portion is not more than $750,000.