Posts Tagged ‘SBA’

In March 2010, President Barack Obama launched a new initiative in an effort to promote small business exporting: stimulate the economy and create much needed jobs. This initiative is called The Obama National Export Initiative: Small Business Exports. If it is successful, we will be seeing many small businesses branching out into the international market, stimulating the economy and producing jobs that range from administrative to warehouse support.

According to the official bill from the White House website, the initiative was promoted by the recent economic and financial crisis. As we all know, millions of people the world over lost their jobs and the current economy worldwide is still very slow in bouncing back. It is the hopes of President Obama that the bill will help stimulate the economy enough to produce new jobs so that those citizens who are underemployed or simply unemployed can return to the work force. It is also hoped that the initiative will work towards stabilizing the American economy with the international economy following not far behind.

The National Export Initiative – shortened to NEI – is expected to help bolster the private sector and the ability for small businesses to engage in exporting activity. The President is confident that it will double the amount of material and product being exported from the United States over the next five years. This will be done by overcoming the many different trade barriers that are in place for small businesses. Some of the hurdles to be overcome: financing; entering the new export market; and getting government support for exporting to other countries that has not always been there before.

A cabinet has been elected by the President to oversee the initiative and the people that have been elected range from the Secretary of State to the Administrator of the Small Business Administration (SBA) to the President of the Export-Import Bank of the United States. They are charged with addressing issues such as: helping small and medium sized enterprises enter the exporting markets; offering federal assistance to these companies; leading trade missions in order to promote these small businesses from the United States; ensuring that commercial advocacy is promoted properly; increasing the line export credit available to these businesses; promotion of growth in the exporting markets; reducing trade barriers; and the overall promotion of services trade.

The first plan of this committee is scheduled to hit the President’s desk 180 days after the initiation of the executive order. The plan is to be a comprehensive one that will outline all of the issues to be addressed and how the NEI plans to carry out their goals. Small businesses in the United States seeking to break into the exporting market will be waiting patiently to see how the committee can help them and how fast the goals can be set in place.

Will The Obama National Export Initiative: Small Business Exports be successful? Even if the tiniest trade barrier is taken down through the work of the NEI it can be considered successful. And if the capital financing assistance comes through, small businesses will see themselves grow.

The biggest obstacle any company faces on a day to day basis is financing. This is especially true for small businesses. Small businesses are constantly fighting to make their way in the world and get a foothold in the domestic market. Those small businesses that have been successful fight to get a foothold in the international market as exporters. It is even more important for these businesses to be able to secure the necessary financing needed to expand overseas.

While there are many obstacles to overcome in exporting the acquiring capital to start the expansion process is the largest one. Small businesses will not find very many investors who will put up capital to finance an overseas venture. The recent credit crisis has made investors leery of shaky ventures such as exporting, and in some cases the funds are simply not available. A successful exporting business can cost a few million dollars to create and keep running, with the initial investment being the largest and most important part. It sets out the financial foundation of the company, allows the company to get established in the country it is servicing and helps build customer relations.

However, finding an investor is not always easy because of the amount of money that has to be put into place during the initial investment phase. Most small businesses are lacking in assets that can be used as collateral for a loan. This makes it hard for most small businesses to get the funds they need to open an exporting branch. There are, however, options available to the small business owner to help them get their exporting business rolling.

One option is assistance from the Small Business Administration (SBA) that can help a small business borrow the capital they need to get their exporting business started. The SBA acts as a go between for the small business and a third party lender, allowing the business to finance up to $750,000 to be used for business purposes such as expansion. This program has been popular with entrepreneurs and is one of the many options available to businesses just starting out.

OPIC (the Overseas Private Investment Corporation) is another option for small businesses looking to expand overseas. The company acts as a facilitator for small businesses that are looking to market their products internationally and have revenue of less than $250 million. OPIC will determine if these companies are eligible for a loan and they could receive anywhere from $100,000 to $250 million to start an export business. Businesses with revenue up to $35 million can receive a loan from $100,000 to $10 million to help start their exporting division.

Both of these programs are backed by the government and recognized as reliable sources of capital for expansion. However, not every company may qualify for a loan and the repayment terms may vary. If the small business is a good fit for the program, then they may be able to realize their exporting dreams quicker than they expected. Contact us today to see how we can help facilitate your capital requirement needs in a timely and cost-effective manner.