International Business Loan by SBA
If you are already engaged in international trade or business or preparing to engage in, or is negatively affected by competition from imports, the Small Business Administration (SBA) in the United States offers an international business loan through their International Trade Loan Program designed for you.
Eligibility for International Trade Loan
Applicants of this international business loan must ascertain that the loan will importantly expand or develop an export market, will upgrade equipment facilities to improve competitive position, is presently negatively affected by import competition, or must be able to show a business plan that reasonably ventures export sales sufficient to cover the loan. Although most small businesses are eligible for SBA loans, businesses of some types are not qualified and a case-by-case determination must be made by the agency.
Loan Proceeds’ Use
Loan granted by the SBA through this international business loan program may be used to acquire, modernize, renovate, expand or improve facilities and equipment to be used in the US to manufacture goods and services engaged in international trade; or refinancing existing indebtedness not structured with reasonable terms and conditions. There cannot be a working capital as part of an IT loan or as part of any refinancing to penetrate foreign markets.
Maturities for International Trade Loan
This international business loan program has loans for facilities or equipment that can have maturities of up to twenty five years. Interest rates are negotiated between the lender and borrower but are subject to SBA maximums which are pegged to the Prime Rate. Interest rates for loans may be fixed or variable; fixed rate loans of $50,000 or more must not exceed Prime Plus 2.25 percent for maturity less than seven years, and 2.75 percent of seven years or more maturity. Loans between $25,000 and $50,000 must have a maximum rate that does not exceed Prime Plus 3.25 percent having maturity of less than seven years, and 3.75 percent for maturity of seven years or more. Loans of $25,000 or less must have a maximum interest rate that does not exceed Prime Plus 4.25 for less than seven years maturity, and 4.75 percent for seven years or more maturity. Loans with variable rates may be pegged to either the SBA optional peg rate or the lowest prime rate.
Maximum Loan Amount for International Trade Loan
This international business loan program has a maximum gross amount of two million dollars and SBA guaranteed amount of $1.5 million for an IT loan that is the same as a regular 7(a) loan. However, exceptions may apply to the maximum SBA 7(a) guaranty amount to a borrower including affiliates.
Guaranty Percent for International Trade Loan
SBA can guarantee up to eighty five percent of loans of $150,000 and less, and up to seventy five percent of loans above $150,000. The maximum amount guaranteed by SBA for the International Trade Loan is $1,250,000.
Collateral for the Loan Program
Collaterals accepted under this loan program are only collaterals located in the US, its territories and possessions. First lien position or first mortgage must be undertaken by the lender on items financed under this loan, and additional collateral may be required including personal guarantees, subordinate liens or things that are not financed by the loan proceeds.