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Tuesday, Oct 29th

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Export Assistance Loans

Export Loan

The most difficult thing about starting a small business is to find enough money to get it on the track. What makes this even more difficult is to obtain finance for export assistance. Exporting provides bright opportunities and challenges for businesses. If provided with a good finance it will set an outright path for growth prospects.

However getting loans in the export sector can be very tough. This is because banks do not accept collateral in the form of foreign based assets. Since small businesses are relatively unknown they fall prey to suspicion of the bank as would any of the foreign business entity which is not well known. Hence, here is a danger of company being fake and the banks don’t want their funds to be wasted.

Some banks have special schemes which assist small businesses in entering the export market. Im bank is one of such banks which provide export loans to companies. This help is applicable to companies with strength of less than 500 employees. The Small Business Administration Export assistance Program is one of the schemes started by Federal and state government in order to help export businesses.

This program helps the companies to expand internationally. Hence the Federal and State government started this scheme to facilitate the expansion of these companies in the global marketplace. This program offers the borrowers a maximum portion of $1.75 million. These funds may be used for renovation, expansion, acquisition or improvement of long term assets.

The details of the program and the requirements may vary, but they provide multiple business resources such as direct loans and loan guarantees, insurance against financial risks which are involved during sale to foreign buyers. The program also provides entry support to foreign market, financial assistance for participation in International Trade shows. The program also provides consulting assistance for initiatives in International market.

The loan maturity is usually 25 years for real estate and around 10-15 years for machinery. For loans greater than $50,000 which has maturity period of 7 years, the lenders may be charged up to 2.75% over prime rate.

Besides this there are Government agencies that do not provide loans to exporters but help the exporters to obtain loans from other sources.