Four Types of Export Financing
Created on July 10, 2013
Many small businesses think they are too small to compete in the world market. In fact, 97 percent of all exporters are small businesses. The U.S. Government has loans, insurance and grant programs to help you become an exporter or expand your exporting business. Here are four different types of financing programs:
Export Development and Working Capital Financing
Enables U.S. businesses to obtain loans that facilitate the export of goods or services by providing the liquidity needed to accept new business, grow international sales and compete more effectively in the international marketplace.
Small Business Administration - Export Working Capital Program
Provides up to $5 million in short-term, transaction-specific working capital loans to U.S. small business exporters. Uses of this financing include: pre-export financing of labor and materials; and post-shipment financing of the accounts receivable generated from transaction-specific overseas sales.
Export-Import Bank - Working Capital Guarantee Program
Provides transaction-specific working capital loans to U.S. exporters, made by commercial lenders and backed by Ex-Im Bank’s guarantee. Uses of this financing include: purchasing finished products for export; paying for raw materials, equipment, supplies, labor and overhead to produce goods and/or provide services for export; covering standby letters of credit serving as bid bonds, performance bonds, or payment guarantees; and financing foreign receivables.
Learn more about the Working Capital Guarantee Program
Small Business Administration - Export Express Program
Provides small businesses that have exporting potential, but need funds to cover the initial costs of entering an export market with up to $500,000 in export development financing to buy or produce goods or to provide services for export. The loan proceeds can be used for most business purposes, including expansion, equipment purchases, working capital, inventory or real estate acquisitions.
Facilities Development Financing
Enables U.S. businesses to acquire, construct, renovate, modernize, improve or expand facilities and equipment to be used in the United States to produce goods or services involved in international trade.
Small Business Administration - International Trade Loan Program
Provides U.S. businesses that are preparing to engage in or are already engaged in international trade, or are adversely affected by competition from imports with up to $5 million in financing to upgrade equipment and facilities. Although this loan program can also be used to refinance existing indebtedness that is not structured with reasonable terms and conditions, it cannot be used as working capital.
Financing for your International Buyers
Enables U.S. businesses to assist their international buyers in locating financing to purchase U.S. goods and services when financing is otherwise not available or there are no economically viable interest rates on terms over one-to-two years. This type of financing is generally used for financing purchases of U.S. capital equipment and services. Financing may also be available for refurbished equipment, software, certain banking and legal fees and certain local costs and expenses.
Export-Import Bank - Loan Guarantee Program
Provides term financing to your creditworthy international buyers, both private and public sector, for purchases of U.S. goods and services.
Export-Import Bank - Direct Loan Program
Provides fixed-rate loans to your creditworthy international buyers, both private and public sector, for purchases of U.S. goods and services.
Export-Import Bank - Finance Lease Guarantee Program
Provides lease financing to your creditworthy international buyers as an alternative to traditional installment loans.
USDA, Foreign Agricultural Service Export Credit Guarantees
Underwrites credit extended by the private banking sector in the United States to approved foreign banks using dollar-denominated, irrevocable letters of credit to pay for food and agricultural products sold to foreign buyers. These programs encourage exports to buyers in countries where credit is necessary to maintain or increase U.S. sales, but where financing may not be available without the guarantees.
Investment Project Financing
Enables U.S. businesses to acquire financing for large-scale projects that require large amounts of capital, such as infrastructure, telecommunications, power, water, housing, airports, hotels, high-tech, financial services, and natural resource extraction industries.
Overseas Private Investment Corporation Small and Medium-Enterprise Financing
Provides medium- to long-term funding through direct loans and loan guarantees to eligible investment projects in developing countries and emerging markets.