SBA International Trade Loans (ITLs) are a form of SBA-guaranteed export financing available for businesses who are involved in producing goods in the U.S. that will be involved in international trade, or to support businesses that have been negatively affected by international trade in recent years. SBA International Trade Loans have a maximum loan amount of $5 million, and provide the lender with a 90% loan guaranty.
What Are The Eligibility Requirements for International Trade Loans?
In general, borrowers applying for an SBA International Trade Loan need to first be eligible for a standard SBA 7(a) loan. This means that they must be a U.S.-based, for-profit business, must have good credit and strong financials, and need to conform to the SBA size standards for their particular industry.
However, International Trade Loans must also specifically be used to “acquire, construct, renovate, modernize, improve or expand facilities and equipment to be used in the United States to produce goods or services involved in international trade.” Other eligible uses involve bringing back production facilities to the U.S. (i.e. repatriation), working capital financing, and refinancing any eligible business debt that is currently offered to the borrower on unreasonable terms.
Additionally, eligible borrowers must show that they are capable of expanding their business into current export markets, or alternatively, that they can develop new markets. SBA International Trade Loans are also available to businesses who can show they they have been hurt by international trade, and can effectively demonstrate that getting SBA financing can make them more competitive.
What Are The Terms for SBA International Trade Loans?
The terms for SBA International Trade Loans are quite similar to the terms for standard SBA 7(a) loans, and include:
Loan Amount: $5 million maximum
Guaranty Amount: 90%
Interest Rate: 6.75% - 9.25% (2.25% to 4.75% above Prime Rate)
Collateral: Must be U.S.-based equipment, property, or business assets (first and second liens allowed)
What Are The Other Kinds of SBA Export Loans
In addition to International Trade Loans, the SBA also offers two other kinds of SBA loans specifically intended for U.S. firms involved in exporting goods to other countries, the Export Working Capital Program (ECWP), and the Export Express Loan. Just like International Trade Loans (ITLs), Export Working Capital Loans offer loan amounts of up to $5 million, with an SBA guaranty of 90%. However, ECWP loans have a maximum repayment term of 3 years, making them significantly less flexible than ITLs.
In comparison, Export Express Loans, which are designed to be approved in as little as 24 hours, have a maximum loan amount of $500,000, an SBA guaranty of 75%, and the same repayment terms as ITLs.