How a Small Business Loan Can Help Your Company Go Global
A Home Business Article Contributed by G. Uma Bennett
How a Small Business Loan Can Help Your Company Go Global
The world revolves around commerce and a small business loan can be the key to taking your company's products into the global marketplace. With the help of the Small Business Administration's Export Working Capital Program, you can access short-term working capital to export your goods. The SBA's Export Working Capital Program was design to support export financing to small businesses who otherwise might not be able to get financing.
Lenders are encouraged to offer these loans with a SBA guarantee of repayment for amounts up to $1.5 million or 90 percent of a loan amount, whichever is less. And the loans are flexible, they can support a single transaction or multiple sales on a revolving basis.
Qualifying for a Small Business Loan to Export
When you make the decision to seek a small business loan to export your goods to a foreign market, you need to know is how to qualify. The Export Working Capital Program was designed to provide short-term working capital to exporters through a cooperation of the Small Business Administration and the Export-Import Bank. The goal is to increase the presence of American made products on the global market. Business owners need only complete a one-page application form and provide documentation to receive a response within 10 days or less. The SBA will also provide a letter of pre-qualification.
Opening the International Trade Market with a Small Business Loan
If you are an established companies seeking new markets or suffering from imports may want to take advantage of international trade opportunities, but need a small business loan to assist in the process, look to the International Trade Loan Program. To qualify, the company is required to show that the loan will have a positive impact on an export market, in either development or expansion, or that they are currently adversely affected by import competition.
The funds of the loan will upgrade equipment to improve competitive position, and must provide a business plan that reasonably projects export sales sufficient to cover the loan.
Using a Small Business Loan to Develop Your Company
As your company grows, additional funds are needed for development and the SBA has small business loans that can provide long-term, fixed-rate financing for major fixed assets (land, buildings, etc.). The Small Business Administration works through Certified Development Companies to assist private-sector lenders to provide growth capital to small businesses. Private-sector lenders provide funds that covers 50% percent of the business project plus a secondary loan for up to 40% of the project cost from the CDC that is 100% SBA-guaranteed.
Repayment Issues That Will Affect Your Small Business Loan
Applying for a small business loan requires a lot of documentation, but lenders are primarily concerned about repayment. Your credit worthiness is very important, so expect for your business credit report to be reviewed, so make sure it is accurate. Lenders want to know if your business has sufficient monthly cash flow to repay the loan, if you invested at least 25 percent to 50 percent of the loan you are requesting.
Do you have the experience and training to operate a successful business, in addition to a well-prepared loan proposal and business plan that demonstrates your understanding and commitment to the business.
