The 3 SBA Export Loan Programs & How To Choose The Right Fit For Your Small Business

The export market is a difficult one to jump into. Businesses looking to launch or expand exporting initiatives often find that banks are reluctant to lend to them on account of the risk involved. Thankfully, the SBA offers three loan programs to help fill this funding gap. In this article, we’re going to detail the structure of these three loan programs and explore the types of exporters that stand to benefit from each.

SBA Export Loans: The Basics

As the SBA states:

• Nearly 96 percent of consumers live outside the US
• Two-thirds of the world’s purchasing power is in foreign countries

Clearly, for merchants looking to expand their customer base, exporting is a no-brainer. However, it’s difficult for a business to expand into the international market for the simple fact that lenders tend to be averse to providing export loans. Again, I’ll quote the SBA on the subject:

Most U.S. banks view loans for exporters as risky. This makes it harder for you to get loans for things like day-to-day operations, advance orders with suppliers, and refinancing existing debts. That’s why the SBA created programs to provide lenders with up to a 90 percent guaranty on export loans.

As the typical federal loan guarantee (including from the SBA) ranges from 50% to 75% of the loan amount, we see how support for exporters is a particular policy goal of the federal government. The opportunity presented by the SBA to businesses looking to launch or expand their exporting is significant. With this article, we wanted to highlight the three different export loan programs offered by the SBA and spell out which businesses are eligible to participate in these loan programs.

When You’re Eligible For An SBA Export Loan

To be eligible for an SBA export loan, obviously, you must be in the business of exporting. Beyond that, each of the three export loan programs has its own eligibility requirements. We’ll detail these requirements when we discuss these programs individually.

If you find that your business is not eligible for the SBA’s export loan programs, you may still be able to take advantage of another SBA loan program. The most popular of these is the 7(a) loan program. Read Merchant Maverick’s 7(a) loan explainer to see if this program might be a good fit for your business.

International Trade Loan (ITL)

The International Trade Loan (ITL) program is intended to help small businesses enter and expand into international markets and to invest in businesses adversely affected by import competition in order to make them more competitive in the marketplace. The ITL offers a combination of fixed asset financing, working capital financing, and debt refinancing with the SBA’s 90 percent guaranty on the total loan amount.

Interest Rates & Fees

Regarding the rates and fees charged by ITL program lenders, the SBA says:

Lenders may charge between 2.25 to 2.75 percent above the prime rate (as published in the Wall Street Journal) depending upon the maturity of the loan. Interest rates on loans of $50,000 and less can be slightly higher.

Other ITL program details include the following:

• The maximum loan amount is $5 million
• The loan terms are up to 10 years for working capital and 25 years for real estate
• The fees are the same as those of the SBA’s 7(a) loan program:
  • Annual service fee of 0.55% of the guaranteed portion of the outstanding balance of the loan
  • For loans of $150,000 or less: 2% of the guaranteed portion
  • For loans of $150,001 to $700,000: 3% of the guaranteed portion
  • For loans of $700,001 to $5,000,000: 3.5% of the guaranteed portion up to $1,000,000, plus 3.75% of the guaranteed portion over $1,000,000
  • The above rates do not apply to loans with a maturity of 12 months or less. For those loans, the fee is 0.25% of the guaranteed portion

ITL Borrower Requirements

In order to qualify for an ITL loan, your business must meet the same requirements as applicants to the 7(a) loan program (see our 7(a) explainer piece for more details). Additionally, you must establish that the loan will allow your business to expand or develop an export market or you must show that your business has been adversely affected by import competition and that the loan will allow your business to improve its competitive position.

SBA Export Express

The SBA’s Export Express loan program is the simplest of its three export loan programs. It is a fast-track program that provides streamlined financing of up to $500,000 to eligible borrowers. Meant to be a speedy financing solution, the SBA claims it will provide an answer to your funding request “in 36 hours or less.”

Interest Rates & Fees

• The interest rate for an Export Express loan of $25,000 or less can range from 4.25% to 4.75% above the prime rate.
• For loans between $25K and $50K, the rate ranges from 3.25% to 3.75% above the prime rate.
• For loans above $50K, the rate ranges from 2.25% to 2.75% above the prime rate.
• The maximum loan amount is $500,000.
• The loan terms and fees are the same as those of the ITL program (which, in turn, are the same as those of the 7(a) program) except that the maximum term for an Export Express revolving line of credit is 7 years.

SBA Export Express Borrower Requirements

As with all SBA export loan programs, this program has the same business size requirements as the 7(a) program. Additionally, according to the SBA, “Any business that has been in operation, although not necessarily in exporting, for at least 12 full months and can demonstrate that the loan proceeds will support its export activity is eligible for Export Express.”

Export Working Capital Program (EWCP)

The SBA’s Export Working Capital Program (EWCP) guarantees cash advances linked to an exporter’s orders and receivables. It offers term loans and lines of credit.

Interest Rates & Fees

Regarding EWCP interest rates, the SBA only states that “Lenders and borrowers negotiate the interest rate and there is no SBA maximum interest rate limit.”

The maximum loan amount is $5 million — and the loan terms and fees are the same as those that apply to the SBA’s other export loan programs and its 7(a) program — except that an EWCP revolving line of credit has a maximum term length of 12 months and an EWCP term loan has a maximum term length of 3 years.

EWCP Borrower Requirements

A potential EWCP borrower must meet the 7(a) program’s requirements and have at least 12 months of business history — though this last requirement can be waived in certain instances. The SBA also requires the personal guarantee of owners (20 percent or more ownership).

Which SBA Export Program Is Right For My Small Business?

Which of the export programs discussed above should you apply for? That depends on the nature of your business needs.

Choose The International Trade Loan Program If…

• You want a loan for fixed assets used for construction, building, and/or real estate equipment
• You’re looking for working capital for export transactions and can afford to wait 5-10 days for a decision from the SBA
• You need help competing with foreign importers in your industry

Choose The SBA Export Express Program If…

• You need a smaller loan ($500K or less)
• You want a loan as quickly as possible
• You want as much flexibility as possible with your loan

Choose The Export Working Capital Program If…

• You need export working capital during long payment cycles
• You want flexibility in negotiating export payment terms
• You don’t mind the personal guarantee requirement

How To Apply For An SBA Export Loan

If you’re looking for guidance in finding an SBA preferred lender for export loans, the SBA offers some helpful resources that should aid your search, as does Merchant Maverick.

We’ve compiled a list (drawn from the SBA’s own data) of the 10 lenders that have distributed the most SBA money to qualifying small businesses. Simply based on their documented track record, the top 10 SBA lenders are all great sources for SBA export loans. You’ll also want to check out the SBA’s Lender Match service, which helps connect your small business to the lenders that best suit your particular business and its financing needs.

Learn About Other SBA Loan Programs

You might find that you don’t meet the eligibility requirements for an SBA export loan or that a different type of SBA loan might be a better fit for your small business. If that’s the case, have a look at our other SBA resources to get a fuller sense of everything the SBA has to offer.

• SBA Loans Explained: Everything You Need To Know
• Your Complete Guide To SBA 7(a) Loans
• SBA 504 Loans: Your Guide To SBA/CDC Real Estate & Equipment Loans
• SBA Loan Calculator