SBA Export Lender News: How to submit International Trade Loans in ETRAN, and more...

Minnesota District Office

u s small business administration

Introduction

The new SBA Export Lender Newsletter and SBA’s Office of International Trade is committed to keeping commercial lenders informed on the features, developments, and opportunities offered by SBA export programs.


How to submit International Trade Loans in ETRAN

A recent update to SBA’s ETRAN software has created an unexpected glitch for lenders submitting ITL loans for SBA general processing (GP). The longstanding e-tran pathway for ITL submission – selecting “International Trade Loans” as the Delivery Method.

Etran Screen

 

Unfortunately, the “International Trade Loans” delivery method no longer gives lenders the option to submit their ITL for SBA underwriting; instead only PLP processing is offered as an option. If you intend to approve the ITL via your PLP authority, this is not a problem. But what should you do if you are either not a PLP lender or if you want SBA to do the approval – e.g., either because you are unable to get a first lien on the assets being financed or if you want SBA to determine the loan qualifies for the ITL’s 90% guarantee?

SBA is working on correcting the unintended glitch in ETRAN, but in the meantime, ITL’s submitted for GP processing must be submitted with the Delivery Method “7a General” with a requested guarantee amount of 75%. Once the ETRAN submission is completed, the lender will then need to email 7aprogram@sba.gov providing the ETRAN application number and asking that the application be manually converted to an ITL 90% guarantee application for GP processing.

We appreciate your patience with this temporary arrangement. SBA is eager to consider all your ITL financing candidates for assistance.


Small business exporters need to preserve access to working capital

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Often a small business competing for a lucrative foreign contract is required to include a bid bond as part of their proposal. This bid bond provides financial security if the business is unable to deliver products or services.

For a bid bond, a business’s bank will issue a Standby Letter of Credit and require they a cash deposit an amount equal to the face value of the Standby Letter of Credit. This cash deposit secures the Standby Letter of Credit, but reduces working capital, necessary to fulfill the contract. Providing 100% cash deposit is not a viable solution for many businesses.

SBA’s export loan guarantee is a solution. SBA Export Express and Export Working Capital programs provide a 90% loan guarantee to lenders to support Standby Letters of Credit. Under these programs, the lender can take a collateral deposit equal to 25% of the face amount of the Standby Letter of Credit. This frees up the remaining 75% of the commitment for use by the exporter as working capital to complete the order.

Standby Letters of Credit backed by Export Express or Export Working Capital are a powerful export finance tool that allows a U.S. exporter to provide the bid bonds needed to win foreign sales without tying up a large amount of the exporter’s working capital. Export performance bonds and advance payment guarantees may also be supported in a similar manner.

SBA Export Working Capital Program and Export Express provide the solution. Contact your local SBA Export Finance Manager to discuss how SBA can help.


Acting Administrator Pilkerton’s Statement on USMCA Agreement

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U.S. Small Business Administration Acting Administrator Chris Pilkerton issued the following statement in response to a successful conclusion of negotiations between Congress and the Administration on the United States-Mexico-Canada Agreement (USMCA).


SBA Export Lender Rankings

As of November 30, 2019

1. Fountainhead SBF LLC $7,188,000
2. Branch Banking and Trust Company $5,000,000
3. Hancock Whitney Bank $5,000,000
4. Patriot Bank, National Association $4,738,000
5. Evolve Bank & Trust $4,470,000
6. American Momentum Bank $3,955,000
7. Plains State Bank $3,695,000
8. OakStar Bank $3,135,000
9. First Bank $3,132,500
10. Meridian Bank $2,400,000
11. BankPlus $2,061,500
12. World Trade Finance, Inc. $2,050,000
13. Third Coast Bank SSB $2,000,000
14. Fulton Bank, National Association $2,000,000
15. Dacotah Bank $1,500,000
16. BizCapital BIDCO I, LLC $1,400,000
17. GBC International Bank $1,350,000
18. The Commercial and Savings Bank of Millersb $1,250,000
19. FinWise Bank $1,179,000
20. First Internet Bank of Indiana $1,050,000
21. Banesco USA $1,000,000
22. Cadence Bank, National Association $1,000,000
23. TD Bank, National Association $1,000,000
24. Citibank, N.A. $1,000,000
25. Bank of Hope $1,000,000
26. CenterState Bank, National Association $965,000
27. Bank of George $850,000
28. BancFirst $750,000
29. Open Bank $750,000
30. First American Bank $700,000
31. Santander Bank, National Association $500,000
32. Central National Bank $500,000
33. Banner Bank $500,000
34. First Pryority Bank $500,000
35. Zions Bank, A Division of $350,000
36. Byline Bank $325,000
37. Beverly Bank & Trust Company, National Asso $275,000
38. Seacoast National Bank $250,000
39. Minnwest Bank $200,000
40. First National Bank Texas $126,000

Grand Total $71,095,00


Export Loan Highlights - November 2019

Here’s a sampling of just a few of the SBA export loans approved last month:

International Trade Loan:

$2,000,000 | 90% ITL guarantee | BankPlus | Manufacturer | Mississippi

Debt refinancing term loan for an Automotive Parts Manufacturer

$6.4MM of export sales projected with 5 continents in all, notably with Canada, Mexico, and the EU

This manufacturer is seeing growing export sales and with 110 employees is the largest employer in this small Mississippi town. The ITL-backed refinance will free up working capital to support the continuing growth. The loan is BankPlus’s first International Trade Loan, and the lender, Leigh McClendon, had this to say about it: “It was a learning process; especially understanding what must be included in the business plan to support the 90% guaranty. Once we knew that there was help out there with the SBA OIT office, we felt comfortable going forward. We are already working on a second IT loan and hope to do many more.”

Export Working Capital Program:

$750,000 | 90% EWCP guarantee | Open Bank | Wholesaler | Texas

Export working capital line of credit for a distributor of recreational watercraft

$3MM of export sales projected with South Korea

A growing market for jet skis and other recreational watercraft is powering this small business exporter, fueled by EWCP financing.

Export Express:

$250,000 | 90% Export Express guarantee | Seacoast National Bank | Wholesaler | Florida

Export working capital line of credit for a distributor of office furnishings

$1MM of export sales projected with Caribbean Island governments.

SBA’s local Export Finance Manager helped this small trader connect with a willing lender and obtain the financing needed to meet multiple export contract opportunities.

Export Working Capital Program:

$1,000,000 | 90% EWCP guarantee | Citibank | Manufacturer | California

Export working capital line of credit for an Aircraft Parts Manufacturer
$2.5MM of export sales projected with the EU.

This renewed export line of credit is expected to support the addition of 7 new jobs for an established manufacturer already employing 140. EWCP-financed sales growth has allowed the company to add 50 jobs over the last two years.


Export lenders have a new SBA ally in the Windy City

SBA’s trade finance team keeps on getter stronger. Last month, Mike Fazio was named as the new SBA Export Finance Manager in Chicago, IL, where he’ll work in support of lenders and exporters throughout Illinois and Wisconsin. Mike is now on duty and can be reached at (202) 322-3352 or michael.fazio@sba.gov.

Previously, Mike was a Financial Analyst in SBA’s Office of Credit Risk Management, a Lender Relations Specialist and the District International Trade Officer at SBA’s Wisconsin District Office, and most recently an Export Development Officer for SBA’s Office of International Trade. Prior to joining SBA, Mike’s career included positions with the Federal Deposit Insurance Corporation (FDIC) and in commercial lending. He also served in the U.S. Marine Corps with international assignments. Mike is a graduate of the University of Wisconsin-Milwaukee’s Executive MBA program, which featured an international residency in Vietnam.


Find export loan prospects through Lender Match

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Lender Match is SBA’s online tool to allow small businesses seeking financing to connect with SBA lenders. And now it’s been upgraded to support export lending.

Businesses seeking financing now can identify themselves as exporters via a drop-down. In doing so, they opt-in to be contacted by SBA lenders interested in meeting this need. Lenders interested in providing export finance will thus readily find export leads.


If you are an SBA lender and your institution is already signed up for Lender Match, be sure to modify your Lender Match Profile to indicate you wish to be alerted when an exporting business is search for financing. If you are not already signed up to use Lender Match, request access via SBA’s Capital Access Financial System (CAFS). If you have questions, contact cls@sba.gov.


Is your borrower the Small Business Exporter of the Year?

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The U.S. Small Business Administration is now accepting nominations for its 2020 National Small Business Week Awards. National nominations must be submitted no later than 2 p.m. CST, January 7, 2020. 

Nominations for the Minnesota District Office categories must be submitted by December 30, 2019.

To learn more visit, Minnesota Small Business Week Awards. For questions, contact Twila Kennedy at twila.kennedy@sba.gov or call (612) 370-2300.


Thank you for your feedback

A big thank you to all of our SBA export lending partners for all of the comments submitted in response to SBA’s “Advanced Notice of Proposed Rule Making” (ANPRM) seeking input on ways to improve the design and workability of its export loan guarantee programs.  In all, 84 commenters submitted suggestions on program improvements to SBA’s export programs – International Trade Loan (ITL), Export Express, and Export Working Capital Program (EWCP). SBA is now in the process of reviewing these recommendations. Comments will be carefully weighed and will guide our efforts to increase the usability of the programs in 2020.


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