How the Small Business Administration's Export Express Program Works

Since 1953, the Small Business Administration (SBA) has provided mentoring and counseling sessions to small business owners. It has helped entrepreneurs land important contracts and delivered millions of loans and loan guarantees. One type of SBA-guaranteed loan is called Export Express, and as the name suggests, it helps businesses access up to $500,000 in financing for a variety of expenses related to exporting their products and services. Here's how the Export Express program works.

At a glance

Export Express represents a streamlined method to obtain SBA-guaranteed financing up to $500,000. While business owners apply for the loan through an SBA-approved lender, the SBA responds to applications within 24 hours. Here's a snapshot of what an Export Express loan has to offer:

How the process works

A business owner who decides they want to expand into international markets accesses the SBA's list of approved lenders and then works directly with one of the banks. The SBA guarantees a portion of the loan, making it easier for the applicant to have their loan approved. The percentage guaranteed depends on the amount borrowed.

The applicant provides all information required and fills out lender-specific forms. Whether the business owner is required to provide loan collateral depends entirely on the policies and procedures of the lender.

Financing may be provided through a line of credit or a standard-term loan. Once the type of loan is established, the business owner and lender negotiate an interest rate that cannot exceed the maximum set by the SBA. For most, the rate is considerably lower than the business owner would be offered through a business credit card.

The bank goes through its approval process, understanding that this loan is backed by the SBA and that the SBA will repay a percentage of the loan if the business owner fails to make payments as agreed.

Once the lender has made a decision, it submits information about the business owner to the SBA. And because the process is streamlined, application results should be back to the business owner in roughly 24 hours.

How can the Export Express loan be used?

As long as an expense is related to export business, the Export Express loan proceeds can be used to cover it. Here are some examples of activities covered by the Export Express loan:

• Purchasing new equipment or real estate
• Participating in trade shows overseas
• Acquiring new inventory
• Translating documentation in foreign languages (For example, if you want a foreign company to read a project proposal, the loan will cover the cost of translation.)
• Paying for standby letters of credit

Eligibility

Not every business will qualify for an Express Export loan. Applicants must meet the following requirements:

• Must have been in operation for at least 12 full months. This requirement may be waived if company leadership has sufficient export expertise and the lender approves the application after putting it through the underwriting process.
• Loan proceeds will be used for export development activity.
• Loan proceeds will allow the small business to enter into a new export market or expand its existing export market.
• Proceeds will not be used to finance foreign operations, other than the marketing or distribution of products and services exported from the U.S.
• The Export Express loan is not used to refinance an existing SBA-guaranteed loan.

When a business owner has big plans but needs money to underwrite those plans right away, the Export Express loan can make it happen. Loans are just one of the many services offered by the SBA. When an entrepreneur is confused about which loan is right for them, the SBA will walk them through their options.