Export Working Capital Program (EWCP)

Agency: Small Business Administration

Program: Export Working Capital Program (EWCP)

Program Description: The EWCP was designed to provide short-term working capital to exporters. The EWCP is a combined effort of the SBA and the Export-Import Bank. The two agencies have joined their working capital programs to offer a unified approach to the government’s support of export financing. The EWCP uses a one-page application form and streamlined documentation with turnaround usually within 10 days. A letter of prequalification is also available from the SBA.

Proceeds of an SBA loan cannot be used: to finance floor plan needs; to purchase real estate where the participant has issued a forward commitment to the builder/developer, or where the real estate will be held primarily for investment purposes; to make payment to owners or pay delinquent withholding taxes; to pay existing debt unless it can be shown that the refinancing will benefit the small business and that the need to refinance is not indicative of imprudent management.

Eligibility: Most small businesses are eligible for SBA loans, some types of businesses are ineligible and a case-by-case determination must be made by the Agency. Eligibility is generally determined by four factors: type of business, size of business, use of loan funds, and special circumstances. In addition, an applicant must be in business for a full year (not necessarily in exporting) at the time of application. The vast majority of businesses are eligible for financial assistance from the SBA. However, applicant businesses must operate for profit; be engaged in, or propose to do business in the United States or its possessions; have reasonable owner equity to invest; and, use all financial resources first including personal assets. It should be noted that some businesses are ineligible for financial assistance.

Funding Information: Loan requests of $833,333 or less are processed by the SBA while loan requests over $833,333 are to be processed through the Export-Import Bank. Borrowers may also have other current SBA guaranties, as long as the SBA’s exposure does not exceed $750,000. When an EWCP loan is combined with an international trade loan, the SBA’s exposure can go up to $1.25 million. Interest rates are negotiated between the borrower and the lender but are subject to SBA maximums, which are pegged to the Prime Rate. Interest rates may be fixed or variable. Fixed rate loans must not exceed Prime plus 2.25% if the maturity is less than seven years, and Prime plus 2.75% if the maturity is seven years or more. For loans of less that $25,000, the maximum interest rate must not exceed Prime plus 4.25% and 4.75% respectively; for loans between $25,000 and $50,000, maximum rates must not exceed 3.25% and 3.75%, respectively. Variable rate loans may be pegged to either the lowest prime rate or the SBA optional peg rate. The optional peg rate is a weighted average of rates the federal government pays for loans with maturities similar to the average SBA loan. Maximum loan maturities are 25 years for real estate and equipment and generally 7 years for working capital.

Timelines: Applications are accepted year round.

Contact: Int www.sba.gov

Sacramento (916)498-6410 Fresno (209)487-5791

Glendale (818)552-3210 San Diego (619)557-7250

Santa Anna (714)550-7420 San Francisco (415)744-6820