The SBA objective for this loan is to provide short-term working capital for exporters. The SBA guarantees up to $1.5 million of financing, or 90% of the loan amount, whichever is less. This loan can be used for a single transaction or multiple ones on a revolving basis.
EWCP Loan Requirements
The EWCP follows the same guidelines as the 7(a) loan for business eligibility requirements, go the SBA website (www.sba.gov) for more information. Additional requirements include:
- The business must have been in operation for at least one year (although not necessarily in exporting) or,
- The owner must have significant experience in exporting.
- Export management or trading companies can use this loan, but they must take title of the goods to be exported.
Eligible Uses of Funds
EWCP funds can be used for single or multiple exporting transactions on a revolving basis.
Ineligible Uses of Funds
EWCP funds may not be used for:
- Fees for professional export marketing advice and services.
- Business travel.
- Participation in trade shows.
- Support of U.S. staff overseas (with the exception for expenses directly related to a transaction).
- Payment to owners, delinquency charges, or withholding taxes.
- Refinancing of existing debt.
- For a single transaction, the maturity is of the amount of time needed to complete the transaction with a maximum time allowed of 18 months.
- For multiple transactions (line of credit), the time allowed is for 12 months with a limited option for renewal (two times). The maximum amount of the line is of three years.
Under the EWCP, the borrower must be able to provide or demonstrate the following:
- Cash-flow projections showing the amount of the loan and the repayment ability.
- Regular progress reports after the loan is made.
- Applicant should state that the loan would expand an export market, improve competitiveness affected by importing, or improve equipment and facilities to increase its competitive position.