U.S. SMALL BUSINESS ADMINISTRATION

Transcription

1 U.S. SMALL BUSINESS ADMINISTRATION LENDING TO BUSINESSES SELLING IN THE GLOBAL MARKETPLACE SBA LENDING TECHNICAL CONFERENCE San Antonio, Texas May 7, 2015

2 SBA Export Loan Program Overview 1) A world of opportunity--small Business Exporters 2) SBA s role within the National Export Initiative/NEXT 3) SBA financing to U.S. exporters: Trends & Data 4) Changes to SBA s export loan programs 5) Export Working Capital Program (EWCP) Preferred Lending Partner (PLP) How to apply for status 6) Your SBA Trade Finance network across the United States 2

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7 National Export Initiative/NEXT 1. Next customer: Help more business export to more markets 305, exporters, 98% SMEs: $2.34 trillion in 2014, 35% SMEs 2. Next shipment: Make exporting easier and less expensive 3. Next transaction: Expand access to export finance 4. Next economic development priority: Empower and support communities and regions to expand trade, investment and jobs 5. Next global opportunity: Build, expand and level the playing g pp y, p p y g field for U.S. companies

8 SBA financing to U.S. exporters Number of Lenders Number of Loans Total Value of Loans ($ Millions) $1,340 $1,190 $918 $ $

9 SBA financing to U.S. exporters NUMBER OF LOANS GROWTH SBA Loan Type FY Export Working Capital % Export Express % Intl. Trade % Core Loans % All SBA Loans to Exporters 1, %

10 SBA financing to U.S. exporters LOAN $ VALUE GROWTH SBA Loan Type FY Export Working Capital Export Express Intl. Trade $219.6 million $35.1 million $295.7 million $30.9 million $251.1 million $577.7 million $307.4 million $23.5 million $285.4 million $616.3 million $95.8 $251 1 $285 4 million Core Loans $ $577 7 $616 3 million All SBA Loans to $923 $1.19 $1.34 Exporters million billion billion 40% -33% 198% 75.8% 45.2%

11 SBA financing to U.S. exporters Export Working Capital FY2010 to FY % increase in available capital and 36% increase in number of loans $296 $307 $266 $ $ No. of Loans No. of Lenders Total Value (Millions)

12 SBA financing to U.S. exporters Export Express FY2010 to FY % increase in available capital, 20.8% increase in number of lenders 239 $ $36 $ $31 $ $40 $30 $20 No. of Loans No. of Lenders Total Value (Millions) $10 $0

13 SBA financing to U.S. exporters International Trade FY2010 to FY2014 substantial growth in number of loans, lenders, and available capital $285 $300 $ $ $ $ $ $200 $150 $100 $50 $0 No. of Loans No. of Lenders Total Value (Millions)

14 SBA financing to U.S. exporters Lender participation by SBA export loan program Total ITL ExportExpress EWCP

15 SBA financing to U.S. exporters SBA core export loan activity by State State Loan Count Loan Value California 100 $104,545,200 Florida 54 $79,780,300 Georgia 26 $44,202,500 Washington 25 $22,891,700 Texas 20 $28,586,000 Illinois 20 $25,089,400 New Jersey 16 $27,999,000 New York 16 $17,664,400 Utah 14 $5,277,300 Pennsylvania 14 $17,421,000 Missouri 13 $26,178,300 North Carolina 12 $23,911,000 Michigan 11 $10,450,600

16 SBA financing to U.S. exporters SBA Export Working Capital by lender FY2014 Lender Loan Count Loan Value GBC INTERNATIONAL BANK 13 $ 13,500,000 CITIBANK, N.A. 12 $ 30,400,000 BANESCO USA 10 $ 6,675,000 WORLD TRADE FINANCE, INC. 10 $ 14,100,000 BBCN BANK 9 $ 13,200,000 FIRST AMERICAN BANK 8 $ 12,050,000 EAST WEST BANK 8 $ 14,980,000 TD BANK, NATIONAL ASSOCIATION 6 $ 5,150, LEVEL ONE BANK 6 $ 5,250,000 HSBC BK USA NATL ASSOC 5 $ 10,300,000

17 SBA financing to U.S. exporters SBA Export Express by lender FY2014 Lender Loan Count Loan Value GBC INTERNATIONAL BANK 9 $ 1,450,000 JPMORGAN CHASE BANK NATL ASSOC 8 $ 2,471,500 CENTRAL BANK 7 $ 790,600 FIRST AMERICAN BANK 6 $ 500,000 CELTIC BANK CORPORATION 6 $ 1,010,000 AMERICAN SAVINGS BANK, FSB 5 $ 272,000 BANNER BANK 5 $ 600,000 BANCO POPULAR DE PUERTO RICO 5 $ 175,000 SUNTRUST BANK 4 $ 1,000,000 EAST WEST BANK 4 $ 1,150,000 U.S. BANK NATIONAL ASSOCIATION 4 $ 1,150,000

18 SBA financing to U.S. exporters SBA International Trade Loan by lender FY2014 Lender Loan Count Loan Value U.S. BANK NATIONAL ASSOCIATION 12 $ 17,756,300 PARKE BANK 9 $ 16,780,000 RIDGESTONE BANK 9 $ 16,049,500 COBIZ BANK 7 $ 4,798,000 ALASKA GROWTH CAP. BIDCO INC. 7 $ 15,004,800 BIZCAPITAL BIDCO I, LLC 7 $ 21,593,700 CERTUS BANK NATL ASSOC 6 $ 16,835,500 FIRSTRUST SAVINGS BANK 5 $ 8,409, GBC INTERNATIONAL BANK 5 $ 4,750,000

19 Changes SBA s export loan programs Export Express Max Loan Amount Guaranty % Use of Proceeds Maturity Max Interest Rates Who Qualifies Benefits to Borrowers $500k 75% guaranty for loans > $350,000 90% guaranty for loans $350,000 May be used for revolving lines of credit (up to 7 year maturity) or for a term loan [same as 7(a)]. Plus standby letters of credit Up to 7 years for Revolving Loans $50, or Lines of less; Credit prime+ 6.5% including term out Loans over period. Otherwise, same as 7(a). $50,000; prime + 4.5% Busi ness must have been in operation for at least 12 months (though not necessari ly in exporting). Provides Note: Can be waived by lender if borrower demonstrates export expertise and lender does conventional underwriting, not relying on credit scoring) Borrower entering a new foreign market or expand in an existing export market. working capital and/or fixed asset financing for companies that t will begin or expand exporting.

20 Changes SBA s export loan programs Export Express: Use of Proceeds For any export tdevelopment expense, including: 1. export development expenses, such as brochure translation or participation in a trade show 2. transaction-specific financing of export deals, including standby letters of credit 3. general lines of credit for export purposes 70% must be used for export-related purposes 4. term loans for permanent working capital, machinery and equipment, or real estate Indirect exports are an eligible ibl use of proceeds supply chain financing i

21 Changes SBA s export loan programs Export Express: Requirements Four Questions, Four Yes Answers SBA Form 1920-C 1. in business for at least 1 yr. (can now be waived by lender) 2. entering a new or expanding in an existing i foreign market 3. not financing offshore operations 4. not selling to a prohibited country Exim s CLS Anticipated annual export sales for the first year enter on SBA Form 1920B.

22 Changes SBA s export loan programs Export Express: General Line of Credit: Special 70% clause (F) language Obtaining a general line of credit for export purposes (as a normal course of business, the borrower may use portions of the line of credit for domestic purposes, as long as no less than 70% of the line of credit will be used for export purposes) (G) language Obtaining a general line of credit for export purposes (as a normal course of business, the borrower may use portions of the line of credit for domestic purposes, as long as no less than 70% of the line of credit will be used for export purposes). Lender must maintain documentation in the loan file that at least 70% of the first full disbursement (100% of approved loan amount) was used for export purposes. p (H) reverts back to language in (F)

23 Changes SBA s export loan programs Export Express: Overall Documentation The applicant must 1) answer affirmatively on question 8 of SBA Form 1919 Are any of your business products or services exported or do you plan to begin exporting as a result of this loan? 2) provide an estimate of annual export sales: $ The applicant must provide documentation on: 1. Description of the business product/service being exported; 2. Explanation of how loan proceeds will enable the business to enter a new market or expand in an existing market; 3. Countries to which the business will export; and 4. Estimate of the borrower s export sales for the 12 month period following the date of the loan application.

24 Changes SBA s export loan programs International Trade Loan Max Loan Amount Guaranty % Use of Proceeds Maturity Max Interest Rates Who Qualifies Benefits to Borrowers $5 million 90% guaranty up to $4.5 $45 million max guaranty up to $4.0 million max guaranty for all working capital Term loan for permanent working capital, equip ment, facilities, land and buildings and debt refinance 10 years for working capital; up to 25 years for real estate Less than 7 years: Over $50, Prime % Loans 7 years or longer: Over $50,000 Prime % Must be a for-profit business & meet SBA size standards; show good character, credit, management, and ability to repay. Must be an eligible type of business. Plus, engaged or preparing to engage in international trade or adversely affected by competition from imports. Provides long-term financing to support companies that are expanding because of growing export sales or have been adversely impacted by imports and need to modernize to meet foreign competition.

25 Changes SBA s export loan programs International Trade Loan A business plan required-- To incorporate a marketing plan and projected export sales if under export expansion eligibility To demonstrate evidence of how the firm had been adversely impacted by imports Under either eligibility criteria, a narrative on how the financing provided will make the firm more competitive Can be used for on-shoring if conditions above are met Indirect exporting is an acceptable eligibility criteria

26 Changes SBA s export loan programs Export Working Capital program Max Loan Amount Guaranty % Use of Proceeds Maturity Max Interest Rates Who Qualifies Benefits to Borrowers $5 million 90% guaranty up to $4.5 million max guaranty Short-term, working-capital loans for 1yearor No SBA exporters. May less maximum be transaction generally interest rate cap based or assetbased. (but SBA Can also May go up monitors for support standby to 3 years reasonableness) letters of credit Must be a for-profit business & meet SBA size standards; show good character, credit, management, and ability to repay. Must be an eligible type of business. Plus, need short-term working capital for exporting. Provides financing to support export orders or the export transaction cycle, from purchase order to final payment.

27 SBA s export loan programs Export Working Capital: Eligibility SBA s SBAs 7(a) size and ownership standards apply based on NAICs-- Manufacturing: under 500 employees (exceptions up to 1500) Wholesaling: under 100 employees Services: $7.5 to $38.5 million Or, Tangible Net Worth under $15 million and Net Income over last 2 years averages less than $5 million Product shipped from U.S.A. or services provided and invoiced by U.S. entity 12 months of operating history or proven expertise Transaction- or asset-based loans Guarantee fee: ¼ of 1% on guaranteed amount, 12 months or less

28 SBA s export loan programs Export Working Capital: Use of Proceeds To acquire/produce goods or services for export Pre-shipment: inventory, WIP, Labor To support accounts receivable of such foreign sales Post-shipment: typically ywith credit insurance, but that can be waived for qualified buyers To support standby letters of credit as part of the transaction Typically serving as a performance or bid guaranty Indirect exports qualify for funding support Structure Transactional (single or multiple) or Asset-Based Line of Credit Advance Rate: 75% against inventory, WIP 85-90% against insured, foreign A/R 90% against Letter of Credit

29 EWCP: Transaction-Based, Self-Liquidating Transaction Based EWCPs can be utilized for single export orders or multiple orders on a revolving basis. No funds are disbursed until there is an export order in place. Funds are used by the borrower to produce goods for a specific export order. SBA requires secure payment method from foreign buyer which will be directed to pay down the EWCP.

30 EWCP: Asset-Based Line of Credit

31 EWCP: How to Apply for a Loan Guaranty Lender must completed 750-EX Supplemental Guaranty Agreement EWCP loans are submitted by the local Lender via E-Tran which will be routed to the appropriate USEAC-based export finance regional manager The EIB-SBA Form a joint application used by SBA and Ex-Im Bank The USEAC-based export finance regional manager prepares the authorization and loan officer report for approval by Loan Guaranty Processing Center Citrus Heights 7(a) LGPC forwards approval and closing documents to the lender.

32 SBA s export loan programs Indirect Exports Applicants who produce products or services that enter into the export channel, but do not directly export their products: Manufacturers using an Export Trading Company Suppliers to other domestic manufacturers that export directly: supply chain financing solution Requires certification from domestic customer that goods are, in fact, being exported. Can now be supported by all three of SBA s core export loan programs: EWCP, Export Express, ITL

33 What Is a U.S. Export for SBA Financing Purposes? Yes No Goods shipped from the U.S. states and its territories? Goods sold to the U.S. US military at abaseoverseas? Services provided drilling for hydrothermal resources in E. Africa? Consultancy services for a conference in, or to provide management advice to, a customer in U.K.? Marketing and expansion of U.S.-based hospitality assets to attract and serve foreign visitors from Germany? Selling logistics services to a Chinese company exporting to the U.S., i.e. freight and/or insurance and in-country y( (USA) transportation services? U.S. designed and ordered goods, manufactured in China and shipped directly to buyer in Japan?

34 Export Working Capital Program (EWCP) Preferred Lending Partner (PLP) Existing PLP Lenders must request separate authority to process EWCP loans using PLP (delegated authority). Existing Ex-Im Bank delegated lenders may apply. Lender receives national ldelegation. Lenders apply with The Office of International Trade for PLP- EWCP status procedures outlined in SOP (G), ),pp Review is based on lender s experience with SBA s EWCP or Ex- Im Bank s WC Program, as well as any other SBA loan programs. Renewals of PLP-EWCP authority coincide id with regular PLP renewal.

35 Export Working Capital Program (EWCP) Preferred Lending Partner (PLP) An active participant p in the EWCP with SBA and/or with Ex-Im Bank for at least six consecutive months immediately prior to application and, if not an Ex-Im Bank delegated lender, has booked no fewer than three (3) SBA EWCP loans during the 24 months prior to application; Lenders that are participating in the Exim Bank s Delegated Authority Lender Program are eligible to participate in the PLP- EWCP program. 13 CFR (d) requires SBA lenders to be supervised and examined by either a Federal Financial Institution Regulator or a state banking regulator satisfactory to SBA.

36 RECOGNITION OF ALL EWCP PREFERRED LENDING PARTNERS AMEGY BANK BANESCO USA BBCN BANK CALIFORNIABANK & TRUST FIRST AMERICAN BANK FIRST GENERAL BANK FULTON BANK NATL ASSOC GBC INTERNATIONAL BANK HSBC BK USA NATIONAL BANK LEVEL ONE BANK MANUFACTURERS & TRADERS TR CO SUNTRUST BANK SYNOVUS VECTRA BK COLORADO NATL ASSOC WILSHIRE STATE BANK WORLD TRADE FINANCE, INC. ZIONS FIRST NATIONAL BANK

37 SBA Trade Finance network across the U.S.

38 SBA Trade Finance network across the U.S. ATLANTA Territory: Georgia, Alabama, Kentucky, West/Central Tennessee ARLINGTON, VA Territory: Virginia, Maryland, District of Columbia, West Virginia BOSTON Territory: Maine, Vermont, New Hampshire, Massachusetts, Connecticut, Rhode Island CALIFORNIA IRVINE Territory: Southern California, Nevada LOS ANGELES Territory: Southern California, Arizona SAN FRANCISCO Territory: Northern California Bakersfield to the Oregon border CHARLOTTE Territory: North Carolina, South Carolina, Eastern Tennessee Dan.Holt@sba.gov x226 CHICAGO temporarily vacant Territory: Wisconsin, Illinois Call Cleveland USEAC CLEVELAND Territory: Ohio, Western New York, Western Pennsylvania, Patrick.Hayes@sba.gov DALLAS/FORT WORTH temporarily vacant Territory: West/North/Central Texas, Oklahoma Vacant: TX: call Denver USEAC OK: call New Orleans USEAC DENVER Territory: Colorado, New Mexico, Utah, Wyoming Bryson.Patterson@sba.gov DETROIT Territory: Michigan, Indiana John.Ogara@sba.gov MINNEAPOLIS Territory: Minnesota, North Dakota, South Dakota, Iowa Carlos.Sosa@sba.gov NEW ORLEANS Louisiana, Arkansas, Mississippi, Gulf Coast of Texas Houston to Brownsville Reginald.Harley@sba.gov NEW YORK CITY Territory: New York City & 5 Boroughs, Eastern Upstate New York, New Jersey Toni.Corsini@sba.gov PHILADELPHIA Territory: Eastern Pennsylvania, Delaware Robert.Elsas@sba.gov PORTLAND Territory: Oregon, S. Idaho, Montana James.Newton@sba.gov; SEATTLE Territory: Washington, Alaska, N. Idaho, Hawaii & Guam Sandra.Edwards@sba.gov; ex.228 MIAMI ST. LOUIS Territory: Florida, Puerto Rico, Virgin Islands Territory: Kansas, Missouri, Nebraska Mary.Hernandez@sba.gov ext. 21 Larry.Cresswell@sba.gov;

39 THANK YOU! Dennis R. Chrisbaum, Director International Trade Finance Office of International Trade U.S. Small Business Administration Alan Lane Murcia, Vice President SBA Program Manager First American Bank Elk Grove Village, Illinois