Three SBA Programs that Help Businesses Develop or Expand Export Markets
“A solid business plan, aggressive marketing, and SBA training and certifications can transform and grow a business.”
- Calvin W. Goings, Regional Administrator, U. S. Small Business Administration
Calvin W. Goings serves as the Regional Administrator (Region 10) for the United States Small Business Administration (SBA), leading a national effort to increase small business outreach and support by strengthening the services provided at SBA’s 1,500 centers.
Prior to serving at SBA’s headquarters in Washington DC, Goings served as a Regional Administrator leading SBA’s efforts in the Pacific Northwest. He also served as a banking executive and spent two decades as a Washington state elected official. Mr. Goings has received numerous awards and citations including the Distinguished Service Award from the Washington State Patrol Troopers’ Association.
Q. What does the U.S. Small Business Administration do?
A. The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.
The SBA helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam.
Our website, http://www.sba.gov/, provides a great deal of information.
Q. Why do you believe that small business plays such a vital role in America?
A. Everyone in America has a chance to be successful. Mayors and other leaders typically come from small businesses. They contribute to civic events and schools and sports leagues for children, and they are our neighbors.
Small business creates the fabric of every community. Small business is also the foundation of America’s economy. They are 90 percent of American businesses, the inventors and entrepreneurs, the creators of two-thirds of new jobs.
Q. What does your job mean to you personally?
A. It is very humbling to be nominated by our leaders in government and asked to serve by the President of the United States. More importantly, it’s an honor to work at the SBA. At a time when the economy has been down and unemployment higher, it’s an honor to help put people back to work.
Q. What makes you successful in your job?
A. President Obama told me to leave Washington DC. He said to go talk to real business owners all across America – to learn about their needs and problems. That proved to be good advice. We created a series of White House sponsored business forums across America. They talked, we listened, and the White House followed up on what businesses said they needed.
Q. What opportunities do you see for U.S. businesses in China and East Asia?
A. America has great products, technologies and services that can benefit people around the world, including China and East Asia. As we make exporting a greater priority, we will find that the demand for exports will grow and US exports will be a driving force of economic growth both here and in other countries.
For the state of Washington, that is significant since it is already the most international trade-dependent economy in the 50 states. I expect Washington and its technology centers like Bellevue to prosper greatly.
Q. Are there any new programs from SBA that will help further these opportunities?
A. The SBA has three programs to improve the competitive position of a business that is expanding or developing export markets.
The first is the International Trade Loan (ITL). ITL supports up to $5 million commercial loans. There is no quantitative or percentage threshold required for the export operation of the borrower or project. It is sufficient that export expansion is projected and the ITL loan will help achieve it.
ITL proceeds may be used for facilities and equipment, permanent working capital, refinancing of business debt, and costs and fees associated with the loan. ITL loans are term loans not to exceed 25 years for real estate; 10 years for equipment or working capital.
Another program that SBA is involved in is the Export Working Capital Program (EWCP) which provides working capital to fulfill the export order. EWCP supports up to $5 million commercial lines of credit that will be used exclusively for export orders.
Indirect exports (i.e., selling components to a firm who will use them in an exported product) are considered eligible exports – a unique EWCP allowance.
EWCP proceeds can be used for inventory & working capital needed for export orders, including support for any required standby letter of credit.
EWCP can be set up as either:
- single transaction-specific term loan
- transaction based-revolving line of credit
- asset-based loan (ABL) with a monthly borrowing base certificate
EWCP loan term is typically one year, but may have a term up to three years max. EWCP loans are only available from lenders who have received EWCP Lender status.
Additionally, SBA offers a program called EXPORT EXPRESS which provides expedited approvals for lenders on their smaller loans for exporters.
SBA offers a 90% guaranty on a loan up-to $350,000 and 75% on a loan between $350,000 -$500,000.
EXPORT EXPRESS proceeds may be used for facilities, equipment, export-specific working capital (either a line of credit or permanent working capital), refinancing of business debt; and costs and fees associated with the loan provided the loan proceeds will support an export development activity.
EXPORT EXPRESS loans may not exceed 25 years for real estate or 10 years for equipment and working capital. A line of credit is for a maximum of 7 years including the ‘term-out’ period. EXPORT EXPRESS loans are only available from lenders who have received EXPORT EXPRESS Lender status.
Q. What advice do you have on how business owners can get help from SBA?
A. My advice is to visit your local SBA District Office. Our commitment at SBA is to work arm-in-arm with owners to grow and create jobs.
Let’s start with business capital. The President signed the American Recovery Act and the Small Business Jobs Act into law. Through these measures, SBA received new tools to keep credit flowing, including raising the government guaranty on many of our loans so that financial institutions would be more likely to lend. As well as reducing or eliminating fees on many of our loans, so that borrowers could keep more of their own money.
Second, as you might imagine, the federal government is the largest purchaser of goods and services in the world – from paperclips to jet airplanes and everything in between, at the SBA we’re tasked to ensure that small businesses get at least 23% of federal contracts, nearly $100 bilion a year!
Third, I always tell small business owners that if you don’t have an SBA counselor, you should. Entrepreneurs need to understand how a solid business plan, aggressive marketing, and SBA counseling, training and certifications can literally transform and grow a business.
Q. What insights do you draw from your personal life?
A. Let me tell you a story. It is kind of interesting that Seattle-Bellevue is a large, modern, sophisticated city, but only a short distance away you can experience other lifestyles and be close to nature if you wish. That is part of the high quality of life here. My family has been here for three generations. Both my wife and I went to college here, and we both have great careers.
My wife Amy and I love living here. We live on a small farm just south of Seattle and Bellevue. I call it an urban farm. We have a garden, fruit orchard and raise turkeys, chickens and a few sheep.
Our son loves it, too. William is seven years old.
Will is our little entrepreneur. He’s allergic to cats and dogs, so we thought he might like a few chickens and seeing those lay eggs. They turned out to be such happy hens that they laid too many eggs.
So Will loaded them into his little red wagon and pulled that wagon over to the neighbors’ houses. He was such a good salesman that we now have 30 chickens. We then added a few “urban” lambs and turkeys.
A good business can come from anywhere. In our case, it started with a pretty basic idea, like my son and his “Happy Hen Eggs,” a little initiative, and a distribution system.
The SBA supports opportunities in China and East Asia
The SBA supports opportunities in many countries and areas outside of the United States including China and East Asia.
SBA supports access to capital for small businesses by providing loan guarantees to commercial lenders. SBA offers uniquely robust suite of programs which are available only to exporters.
SBA programs are lender-driven. SBA guarantees the loan rather than lending directly.
SBA provides a federal guarantee for lenders on their business loans to small business exporters; typically, 90% guarantee on loans to a single borrower up to $5 million with no minimum loan size.
The borrowing business (including any affiliates) must not exceed SBA’s “small business” definition. This is tangible net worth of less than or equal to $15 million and a 2 year average net income after taxes (excluding carryover losses) of less than or equal to $5 million.
The business need not be exporting currently; but exporting must be planned. Each SBA export program has a different minimum export threshold for eligibility.
Exports may be either goods or services. International tourism, software licenses, and professional services are considered a service export. There is no minimum US content requirement. Defense exports with proper licensing are permitted.