Finally. After nailing down your business strategy in the US, you’re ready to take your sales and profits to the next level by expanding into new markets overseas.
You’ve pinpointed the right foreign markets for your products, partnered with the right overseas distributors and suppliers, and prepared your legal and compliance teams, who are all ready to set you up for success.
There’s just one snag – it may be difficult to get financing to actually “go global.” Sure enough, a 2016 small business exporting survey found that 35% of small business owners said securing financing for exporting operations was “more difficult” than getting a loan for traditional business operations.
But that doesn’t mean there aren’t a slew of export lenders willing to help you succeed. Here are some of the best places to get your financing.
Going to the bank for financing is a popular option among small businesses, especially for those who have a strong banking relationship, good credit, and well-documented financial records. Larger banks can sometimes offer flexible and long-term repayment credit options, while banks of all sizes may offer specialized Small Business Administration (SBA) loans that cater to small businesses and are often backed by the US government. That said, not all banks like the added risk of dealing in international markets, so banks with an international department may serve you best.
Your bank doesn’t offer SBA loans? Try going directly to the SBA, who can help you find a third-party lender that follows its federal guidelines. The SBA’s export loan programs range from the smaller Export Express Loan which can finance up to $500,000 with 36-hour loan approval turnaround, to the Export Working Capital Program which provides advances for up to $5 million to fund export transactions – from purchase orders to collections.
Looking to do business in high-risk foreign markets? While other lenders could be reluctant to help you, the US Government’s Overseas Private Investment Corporation (OPIC) offers a variety of business loans to “encourage development in regions that have experienced instability or conflict.”
Using capital from the private sector, OPIC finances SMBs that provide renewable energy, housing, agriculture, consumer goods and other things that foster development. OPIC even offers political risk insurance to protect against political violence, government interference, or currency inconvertibility.
As another organization that finances small businesses when others won’t, the Export-Import Bank works with your private bank by offering repayment guarantees on a variety of trade loans designed to seal the deal with foreign buyers. As an example, EXIM’s popular Short-Term Credit Insurance protects your foreign accounts receivables if a foreign buyer fails to repay, which greatly reduces risk and makes your bank more willing to lend to you. EXIM can also work with a private bank through its Working Capital Guarantee Loan Program to help you pay for labor, materials, and other resources you need to make sales overseas.
From these organizations to venture capital funds and Angel investors, there are plenty of lenders that are willing to help fund your international expansion plans. Of course, once you get the funding you need, you’ll also need someone to help you pay your overseas suppliers, distributors, employees, or any other party that’s vital to your international success.
That’s where we come in. Every year, World First USA, Inc. helps thousands of businesses transfer money safely and quickly across borders, and we often offer lower fees and better currency rates than a bank. We can also help protect your business from currency fluctuations. Click here to get more information and see to how much you could save on international payments.