A minuscule portion of SBA-backed loans made in Iowa are being used to support direct or indirect exporting, despite higher loan guarantees the Small Business Administration offers as an incentive for companies to spur export activity. 
     
In the past three fiscal years, the SBA in Iowa approved 51 loans totaling just over $2.4 million to support exporting, which by dollar amount was less than one-third of 1 percent of the $723.6 million in loan guarantees made in the same period, according to data tracked by the SBA. 
 
“We feel like there are a lot of missed opportunities to use SBA for exporting,” said Dave Lentell, lead lender relations specialist with the SBA Iowa District Office in Des Moines. “A higher guarantee not only makes it more attractive for lenders to provide businesses the capital they need to finance their export-related needs, it can also make it possible for lenders to provide higher amounts of financing than perhaps their internal lending limits might allow.” 
 
I spoke with Lentell during an exporting seminar held recently at Des Moines Area Community College’s Southridge Campus, where he outlined how companies can qualify. The programs include Export Express, which applies to loans up to $500,000; an Export Working Capital program for loans up to $5 million; and the International Trade Program, which provides the higher 90 percent guarantee on SBA 7a loans that are tied to export activity.  
 
Lentell said that many lenders and borrowers are unaware that indirect export activity — such as financing a new piece of equipment used to make components it sells to a larger company exporting the final product — qualifies for export loan guarantees. “If you can document what you’re producing for up the chain is being exported, you can qualify.” 
 
Additionally, “We want to make borrowers aware so there is more use of them,” he said. “There are a lot of banks out there that could be taking advantage of the higher guarantees.”