Can I use an Export Express line of credit for domestic sales?
Short answer
Partly. A general Export Express line can support domestic sales, if no less than 70% of it will be used for export purposes. SOP 50 10 8.1, Sec. B, Ch. 5, Para. A.1.a sets that rule.
Partly. A general Export Express line may support domestic purposes in the normal course of business. No less than 70% of the line must be used for export purposes (SOP 50 10 8.1, Sec. B, Ch. 5, Para. A.1.a).
The loan must tie to export development
Export Express proceeds must fund an export development activity. Examples include a general line for export purposes, transaction-specific financing and expanding a U.S. production facility for export goods (Para. A.1.a).
What proceeds cannot do
- Finance operations outside the United States, except marketing or distribution of U.S. exports (Para. A.1.c).
- Fund a change of ownership (Para. A.1.c).
- Refinance an SBA-guaranteed loan, except as Appendix 14 permits (Para. A.1.c).
- Refinance debt owed to a Small Business Investment Company or New Markets Venture Capital Company (Para. A.1.a).
Two related features
- Standby letters of credit are allowed when required as a bid bond, performance bond or advance payment guarantee (Sec. A, Ch. 3, Para. A.2.f).
- On a transactional line, no disbursement can be made if the foreign buyer will pay after the loan's maturity date (Appendix 17, Para. B.6).
If your business is mainly domestic, an SBA Express line has no such export test (Sec. B, Ch. 2).
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