Export Working Capital Program – A Fact Sheet for Small Businesses SBA’s Role in Export Financing
by U.S. Small Business Administration www.sba.gov
Most banks in the U.S. do not provide working capital advances on export orders, export receivables or letters of credit. Because of that, some small businesses may lack necessary export working capital to support their export sales. That is where an SBA program can make the difference. SBA provides lenders with up to a 90% guaranty on export loans as a credit enhancement, so that the lenders will make the necessary export working capital available.
The SBA delivers its export loan program through a network of SBA Senior International Credit Officers located in U.S. Export Assistance Centers throughout the country. These specialists understand trade finance and are available to explain SBA’s export lending programs, the application process and forms and to guide exporters in selecting appropriate payment methods. They can also link companies to specialists for increasing export sales and managing foreign payment risk.
Exporters can apply for EWCP loans in advance of finalizing an export sale or contract. With an approved EWCP loan in place, exporters have greater flexibility in negotiating export payment terms—secure in the assurance that adequate financing will be in place when the export order is won.
Benefits of the EWCP
- Financing for suppliers, inventory or production of export goods
- Export working capital during long payment cycles
- Financing for stand-by letters of credit used as bid or performance bonds or down payment guarantees
- Reserves domestic working capital for the company’s sales within the US
- Permits increased global competitiveness by allowing the exporter to extend more liberal sales terms
- Increases sales prospects in under-developed markets which have high capital costs for importers
- Contributes to the growth of export sales
- Low fees and quick processing times