International Trade Programs 2010 Entrepreneurship


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  • In summary—Small business is BIG BUSINESS , and you should know that your interests—in both domestic and international markets, is VERY WELL represented by the US Small Business Administration and from our sister agencies in the Trade Promotion Coordinating Committee (TPCC.) Thank you.
  • International Trade Programs 2010 Entrepreneurship

    1. 1. International Trade Programs <ul><li>2010 Entrepreneurship </li></ul><ul><li>Conference </li></ul><ul><li>4/16/10 </li></ul>Helping you start, grow and succeed
    2. 2. WHAT IS THE SBA ? <ul><li>Small Federal Government Agency </li></ul><ul><li>Established by Congress in 1953 </li></ul><ul><li>Aid, counsel and assist Americans start, operate, and expand their businesses </li></ul><ul><li>Provide access to capital, counseling and training, and increase federal procurement opportunities </li></ul><ul><li>SBA is primarily a guarantor of loans made by private and other institutions. </li></ul><ul><li>The SBA does not offer grants to start or grow small businesses. </li></ul>
    3. 3. How Important Are Small Businesses to the U.S. Economy? <ul><li>Represent 99.7 percent of all employers </li></ul><ul><li>Employ half of all private-sector employees </li></ul><ul><li>Generated 2/3 of net new jobs annually over the last decade </li></ul><ul><li>Are employers of 39 percent of high-tech workers (such as scientists, engineers, and computer workers) </li></ul>
    4. 4. National Export Initiative <ul><li>Double Exports in 5 years, create up to 2 million jobs </li></ul><ul><li>3 Main components </li></ul><ul><ul><li>Expand trade advocacy </li></ul></ul><ul><ul><li>Increase access to credit (trade finance) </li></ul></ul><ul><ul><li>Remove trade barriers </li></ul></ul>
    5. 5. National Export Initiative <ul><li>SBA will: </li></ul><ul><li>Identify SMEs with export potential </li></ul><ul><ul><li>“ Have you thought about exporting?” </li></ul></ul><ul><li>Prepare SMEs for exporting </li></ul><ul><ul><li>SCORE, SBDCs, WBCs </li></ul></ul><ul><li>Connect SMEs with actual trade opportunities </li></ul><ul><ul><li>Collaborate with other federal agencies on trade missions, etc. </li></ul></ul><ul><li>Support SMEs with export financing </li></ul><ul><ul><li>Export Express, EWCP/Ex-Im Co-guarantee </li></ul></ul>
    6. 6. SBA PARTNERS <ul><li>U.S. Exporters </li></ul><ul><li>Banks: Regional and Local Community </li></ul><ul><li>State and City </li></ul><ul><li>U.S. Government International Agencies </li></ul><ul><li>U.S. Commercial Service </li></ul><ul><li>Overseas Private Investment Corporation (OPIC) </li></ul><ul><li>U.S. Export-Import Bank (Co-guarantee) </li></ul><ul><li>U.S. Department of Agriculture/Commodity Credit Corporation </li></ul>
    7. 7. SBA Loan Programs for Exporters <ul><li>Export Working Capital Program (EWCP) </li></ul><ul><li>SBA-EXIM EWCP Co-Guarantee Program </li></ul><ul><li>Export Express </li></ul>
    8. 8. Export Working Capital Program <ul><li>90% Guarantee </li></ul><ul><li>$1.5 Million is maximum SBA guaranteed portion </li></ul><ul><li>Transaction financing </li></ul><ul><li>Single Project or Revolver </li></ul><ul><li>Quick turnaround time </li></ul>
    9. 9. <ul><li>Company meets SBA size standards </li></ul><ul><ul><li>Based on NAICS </li></ul></ul><ul><ul><li>Manufacturing: under 500 employees </li></ul></ul><ul><ul><ul><ul><li>can be as high as 1,500 employees </li></ul></ul></ul></ul><ul><ul><li>Ex-Im has no restrictions for size. </li></ul></ul><ul><li>Product is titled and shipped from U.S. </li></ul><ul><ul><li>No U.S. content requirement, Military OK </li></ul></ul><ul><li>In business 12 months or proven expertise </li></ul><ul><li>Other SBA eligibility provisions </li></ul><ul><ul><li>Criminal History, Previous loss to govt. etc. </li></ul></ul>Export Working Capital Program Eligibility
    10. 10. EWCP - Indirect Exports <ul><li>Applicants who produce products or services that enter into the export channel but do not directly export their products are eligible for EWCP financing </li></ul><ul><ul><li>Manufacturers using an Export Trading Company </li></ul></ul><ul><ul><li>Suppliers to other domestic manufacturers </li></ul></ul><ul><li>Requires certification from domestic customer that goods are in fact being exported. </li></ul>
    11. 11. EWCP Use of Proceeds <ul><li>Loan proceeds to acquire/produce goods or services for export, the accounts receivable of such foreign sales or standby letters of credit. </li></ul><ul><li>Pre-shipment Guarantee </li></ul><ul><ul><li>Labor and Material costs </li></ul></ul><ul><li>Post-shipment Guarantee </li></ul><ul><ul><li>Foreign Accounts Receivable financing </li></ul></ul><ul><li>Combination Guarantee </li></ul>
    12. 12. CO-GUARANTEE BETWEEN SBA AND THE U.S. EXPORT IMPORT BANK <ul><li>Max loan amount of $2 million </li></ul><ul><li>SBA underwriting rules apply </li></ul><ul><li>SBA guarantee fee at 0.25% will apply </li></ul><ul><ul><li>Longer than 12 months fee eliminated (temporarily as a result of Stimulus Package) </li></ul></ul><ul><li>ExIm requirement for 51% domestic </li></ul><ul><li>content must apply </li></ul><ul><li>ExIm ban on military goods will apply </li></ul>
    13. 13. EWCP - How to Apply <ul><li>Apply with a commercial loan officer at your existing bank. The Bank will forward your application to SBA for approval if SBA support is needed for the transaction. </li></ul>
    14. 14. EXPORT EXPRESS <ul><li>Maximum loan amount $250,000 </li></ul><ul><li>Eligibility </li></ul><ul><ul><li>applicant in business for at least 12 months </li></ul></ul><ul><ul><li>proceeds for developing or expanding export markets </li></ul></ul><ul><li>Maximum loan guarantee coverage </li></ul><ul><ul><li>90% as a result of American Recovery and Reinvestment Act </li></ul></ul><ul><ul><li>normally 85% Up to $150,000 and 75% up to $250,000 </li></ul></ul>
    15. 15. EXPORT EXPRESS <ul><li>Minimizes Use of Government Forms and Procedures </li></ul><ul><li>Streamlines Processing and Costs of Smaller Loan Transactions </li></ul><ul><li>Lenders Granted Expanded Authority and Autonomy </li></ul>
    16. 16. <ul><li>Finance export development activities </li></ul><ul><ul><li>Participation in a foreign trade show </li></ul></ul><ul><ul><li>Translation of product literature for foreign markets </li></ul></ul><ul><li>Provide transaction-specific financing for overseas orders </li></ul><ul><li>Provide revolving lines of credit for export purposes – term may not exceed five years </li></ul><ul><li>Finance standby letters of credit used for either bid or performance bonds </li></ul>EXPORT EXPRESS CAN HELP
    17. 17. A free resource guide that provides a comprehensive guide to exporting.
    18. 18. Trade Finance Guide: A Quick Reference for U.S. Exporters 2008 designed to help small and medium-sized enterprises learn the basics of trade finance. Turn export opportunities into actual sales and achieve the ultimate goal of getting paid -especially on time. Concise, two-page chapters offer the basics of numerous financing techniques, from open accounts, to forfaiting, to government assisted foreign-buyer financing. Trade Finance Guide
    19. 19.
    20. 20. QUESTIONS? <ul><li>Patrick Tunison </li></ul><ul><li>Office of International Trade </li></ul><ul><li>[email_address] </li></ul><ul><li>(202) 205-6426 </li></ul><ul><li>Michael K. Jackson </li></ul><ul><li>Baltimore District Office </li></ul><ul><li>[email_address] </li></ul><ul><li>(410) 962-6195 x303 </li></ul>