Going global can improve your business in myriad ways. Off the bat, international expansion increases your potential customer base, allowing you to expand sales and take advantage of bulk supplier pricing. International branding may allow you to price at a premium in new markets, especially if your wares are scarce, and the “international” status will give your brand more credibility in markets where you already conduct business.
It’s no wonder then that a recent FedEx survey showed that 65 percent of international small businesses are seeing revenue growth, compared to 46 percent of those who remain domestic. Better yet, these growing international companies are 20 percent more likely to be hiring employees, setting them up for additional future growth.
However, going global has hurdles, not the least of which is financing. Getting international growth capital can be more difficult than traditional financing, despite its high growth potential.Don’t fret – here are a few options designed to help budding global entrepreneurs based in the US.
A Traditional Bank
When it comes to taking out a loan, you may be among the many business owners that make a traditional bank your first stop. You likely have an existing relationship for daily banking needs, and if you took out a loan to start your business, you’re already familiar with the process.
As previously noted, banks are more hesitant to invest in international expansion as opposed to domestic, but if you have a good credit score and well-organized accounting books, you’re likely a strong candidate for a commercial loan from your bank.
If you don’t qualify for a commercial loan, many banks also offer SBA loans, which are backed by the US Small Business Administration. In this case, the bank issues a loan, but repayment of the debt is secured by the US government. Check if your preferred bank offers this type of loan in addition to commercial business loans.
A US Small Business Administration (SBA) Lender
Traditional banks aren’t the only ones who offer SBA loans – credit unions and other financial institutions often offer them as well. Check out the SBA’s preferred vendors (Google “SBA PLP in my area,” which stands for US Small Business Administration Preferred Lender Program), to find out who has a track record for successfully processing this type of loan.While SBA loans can be difficult to attain, they are incredibly popular because they are often more financially manageable than other types of loans. Furthermore, SBA offers loans up to $5 million for qualified businesses – that’s a lot of international purchase orders!
The Overseas Private Investment Corporation
If you’re striking out with commercial and SBA loans, it might be because of the market to which you’re looking to expand. There’s an agency for that! It’s called the Overseas Private Investment corporation, and its mandate is to incentivize development in traditionally unstable or conflict-ridden regions. The agency advances national security goals by providing loans to businesses that will create jobs and economic stability in key markets, among other things.
To qualify, your business must be primarily US-owned, and your expansion cannot hurt the US economy. Regionally the agency is focused on Sub-Saharan Africa, North Africa, Southeast Asia, and The Middle East.
The Export-Import Bank (EXIM)
EXIM not only offers loans for US exporters, it also provides protection against buyer non-repayment, issues foreign bid bonds, and provides credit insurance. It’s run like a private business – no taxpayer money goes to the agency – and its goal is to fill the gaps that private export financing won’t fund.
Securing financing is just the first step of many when you go global. After you secure funds, look for transparent, reliable partners to help you with tasks like mitigating currency risk when you’re transferring money, handling product returns across borders, and navigating complicated legal systems. The right partner will not only help you in a fast, cost-efficient manner, but it’ll also help you find trustworthy partners for the services outside their scope.
Specializing in international currencies and money transfer, World First combines specialist knowledge of foreign exchange markets with technological innovation to help individuals and businesses manage cross-border currency payments quickly, securely and transparently.