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Is Your Business Ready for Global Expansion?
If you’ve been thinking of growing your business, have you considered going global? If so, you’re not alone. Seventy-nine percent of small business decision makers believe international trade directly helps their companies and 88% believe it’s critical to the U.S. economy.1
Diversifying your revenue base is one of the most compelling reasons to pursue an international presence. However, there are additional noteworthy advantages.
- Extends the product life cycle when selling to markets less developed than the domestic market.
- Minimizes seasonal or cyclical impact on some products.
- Spreads fixed costs over a greater volume of goods sold.
Currently 68% of small businesses import and 73% export goods.2 If you’re ready for global expansion but unsure of the financial implications, there are resources to help with advice and funding related to international trade.
Who is involved in trade finance?
Eighty to 90% of world trade is dependent on trade finance.3 In collaboration with U.S. financial institutions, the Small Business Administration (SBA) has well-established 7(a) loans and lines of credit to meet varying capital needs of small businesses engaging in international commerce. Businesses may use the loans for:
- Acquiring, refinancing or improving real estate.
- Short- and long-term working capital.
- Refinancing business debt.
- Purchasing and installing machinery and equipment.
- Purchasing furniture, fixtures and supplies.
- Changing ownership.
Any of the uses above may also be combined in requests for multipurpose loans to fund global expansion.
Each loan type carries specific amounts and conditions. The borrower and participating lender will negotiate specific terms, which are subject to SBA requirements.
SBA 7(a) Loan Program
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7 (a) Small |
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Maximum Loan |
$500,000 |
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Maximum SBA Guarantee % |
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Forms |
SBA Form 1919 |
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SBA Turnaround |
2-10 business days |
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Collateral |
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SBA Express |
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Maximum Loan |
$500,000 |
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Maximum SBA Guarantee % |
50% |
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Revolving Lines of Credit |
Up to 10 years |
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Forms |
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Collateral |
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Export Express |
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Purpose |
To support small businesses that wish to develop the export side of their business. |
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Maximum Loan |
$500,000 |
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Maximum SBA Guarantee % |
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Revolving Lines of Credit |
Up to 7 years |
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Forms |
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Collateral |
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Standard 7(a) |
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Maximum Loan |
$500,001 - $5MM |
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Maximum SBA Guarantee % |
75% |
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Revolving Lines of Credit |
See SBA Express and Export Express |
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Forms |
SBA 1919 |
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SBA Turnaround |
2-10 business days |
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Collateral |
“Fully secured” if the lender takes security interests in all assets acquired, refinanced or improved with the 7(a) loan and available fixed assets of the applicant with a combined adjusted net book value up to the loan amount.Other conditions apply (see SOP 50 10) for details. |
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Export Working Capital |
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Purpose |
For businesses that can generate export sales and need additional working capital to support these sales. |
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Maximum Loan |
$5MM |
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Maximum SBA Guarantee % |
90% |
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Revolving Lines of Credit |
Terms of 36 months or less |
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Forms |
SBA Form 1919 |
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Collateral |
Export-related inventory and foreign accounts receivables generated by export sales financed will be considered to provide adequate collateral coverage. |
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International Trade |
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Purpose |
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Maximum Loan |
$5MM |
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Maximum SBA Guarantee % |
90% |
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SBA Turnaround |
5-10 business days |
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Working Capital Pilot Program (Lending Available August 1, 2024) |
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Purpose |
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Maximum Loan |
$5MM |
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Maximum SBA Guarantee % |
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SBA Turnaround |
5-10 business days |
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Source: U.S. Small Business Administration, “Types of 7(a) Loans,” August 16, 2023
What are eligibility requirements to participate in the 7(a) program?
Most small businesses are eligible to participate in the program. However, there are strict eligibility requirements. Specifically, businesses applying for the loans must be:
- Conducting operations and not be ineligible per the code of Federal Regulations 120.110.
- U.S.-based, for-profit organizations.
- Sized according to SBA requirements.
- Unable to obtain credit or reasonable terms from non-federal, non-state and non-local government sources.
- Creditworthy and able to repay the loan.
Borrowers must meet additional requirements to participate in the 7(a) Working Capital Pilot Program.
- Must be in operation 12 months prior to filing an application.
- Able to provide timely and accurate financial statements, accounts receivable, accounts payable aging and inventory reports.
If you’d like more details on 7(a) loans, visit the SBA’s website. Your financial institution can also assist with questions about program requirements, as well as other available lending programs.
We’re ready to assist with your global expansion.
It’s important to work with a financial institution that understands the ins and outs of international trade. An experienced banking partner not only offers lending options, but also helps mitigate potential trade risks.
If you’re interested in global expansion, we can help. Synovus partners with the SBA to offer funding with your goals in mind.Important disclosure information
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
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