Small businesses that offer export services face many hurdles in the current global economy. Larger companies are obviously a major threat, and will remain so. However, in recent years, the countries to which America sends its exports have experienced booming economies. American exports face increased competition from the countries they need as clients. On top of this, reasonable financing terms are not always available for a small export company. An export company's business plan needs to know exactly where to obtain a readily available source of financing. And one major source of funding can be a microloan. A microloan is a short-term loan with a small monetary payload. A major source of microloans for small businesses (up to $1.5 million) is the Small Business Administration.
In order to get this loan, your business plan must focus on several things. First, if you haven't been in business for at least one calendar year, your management summary must reflect all of your export trade experience. Secondly, a business plan for the SBA's Microloan Program must concentrate on how you will utilize the loan amount. For example, the funds should be used only for working capital needs that involve your export transactions. Since cash flow projections will be required to exactly outline your needs, your business plan's pro forma financials must be detailed and reasonable. You must also ensure that you will provide regular progress reports, and your business plan should include language to that effect.
Collateral for an SBA microloan will be equal to 100% of the guaranty amount, and it must be located within the U.S. This shouldn't be a problem for most businesses, since they retain many valuable business-related assets. After all of this work, your business plan must be "bank-ready" in the sense that it will explain exactly how you plan to expand your market. Since the unfair business practices of large importers have likely driven you to a microloan, adhering to guidelines detailing adverse import competition shouldn't be a problem. Finally, your business plan must also focus on sane projections that will ensure that your loan will be covered.
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