Published Jan. 23, 2013
ATLANTA — About $3.7 billion in loans were approved last year in the Small Business Administration’s Southeast region, with a number of deals involving companies exporting products to foreign markets.
SBA-guaranteed loans to South Carolina small businesses hit a record high of $222.9 million in fiscal year 2012, which ended Sept. 30, eclipsing the 2011 record of $199.7 million.
|Cassius Butts, SBA region administrator|
While services and accommodations topped the list of South Carolina customers, the SBA is seeing more exporters “taking advantage of the world market,” said Cassius Butts, SBA region administrator.
Exporters are a key customer for the SBA, Butts said, adding that about 70% of all exporters have fewer than 20 employees.
Nearly 90% of the agency’s 7(a) loans are used for exporting in South Carolina, Butts said, attributing growth to the Port of Charleston.
The 7(a) program, which has a limit of up to $5 million, is the SBA’s most common loan, and includes financial help for businesses with special requirements.
The agency’s 7(a) program includes lending businesses that have been impacted by NAFTA.
“We have a product — our Export Express program — that can really give a lot of support, particularly in your backyard,” Butts said, referring to the Southeast.
Export Express is offered in the SBA’s 504 Certified Development Company program, which has a top lending limit of $5.5 million.
The program also includes microloans, International Trade, and Export Working Capital loans.
The maximum amount for a microloan is $50,000; however, the average loan amount is $13,000.
The Export Express Loan, also offered under the 504 program, provides financing up to $500,000. It allows participating lenders to use their own forms, procedures and analyses, Butts said. Then, the SBA provides an answer in 36 hours or less.
“This not your father’s or mother’s SBA,” Butts said.
The Export Express program also allows the loan to work with a specific term or as a revolving line of credit.
Also offered under the 504 program is the Export Working Capital loan, which provides financing up to $5 million as a credit enhancement.
The International Trade Loan Program offers financing for fixed assets and working capital for companies planning to start or continue exporting, or that have been adversely affected by competition from imports.
The SBA also promotes exports through a State Trade and Export Promotion grant. For the second year in a row, the S.C. Commerce Department received $279,128 through the program to help small businesses cash in on exporting products.
In 2011, the first year of the program, the Commerce Department received a $202,669 grant. It assisted 35 companies, which reported $1.6 million worth of export sales.
Participating companies were able to reach new markets on four continents. Some of the markets the companies focused on included China, Singapore, South Korea, Japan, Colombia, Mexico, Canada and Kenya.
The export loan programs tie in with President Barack Obama’s National Export Initiative, which calls for doubling U.S. exports in five years, aiming to support 2 million jobs.