Pub. 7 2017-2018 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S September • October 2017 19 OVER YEARS OF IMPACT Call us today at 303.860.0242 or refer a small business anytime at coloradoenterprisefund.org Financing startups and existing businesses up to $500K plus SBA loans up to $250K Early Success Academy l Denver Program, can support Revolving Line of Credit (RLOC) facilities of $5 million with 75 percent advance rates on raw material, inventory, andWIP. I knowwhat youmay be thinking, “Wait a second, our bank’s credit policy excludes WIP.” That is why you need to use a credit enhancement.Government credit enhancements enablebanks to make loans that they otherwise wouldn’t be able tomake. If your high-growth client needs to go to the next level, but you can’t get a conventional credit throughcommitteebecause theassetswon’t support the new facility, why not consider an SBA guarantee? By using an SBA-backed RLOC, you unlock assets that were previ- ously unavailable, or insufficient, to support the credit. Recently, I assisted a lender with an Export Working Capi- tal Loan for a small wholesaler in the Mountain West that had on-going sales overseas. The business does about $80 million annually to major retailers and distributors, mostly interna- tionally. The company’s only assets are inventory and accounts receivable. They needed a $7millionRLOC to keep the operation moving. The solution to their cash flowproblemwas a $2million conventional (non-guaranteed) RLOC for the domestic business, and a $5 million SBA Export Working Capital RLOC. The SBA RLOC is supported by the export inventory and foreign accounts receivable. Because this loanwasmade to an exporter, the lender utilized an SBA Export Working Capital RLOC which carries a 90 percent guarantee. Why was this loan a success? The bank was able to provide a total of $7 million in credit, which supports $80 million in an- nual revenue, with only $2.5 million exposure. It was a win-win situation for the lender and the small business. The customer stayed with the bank and so did its deposits, international wires business, and credit cardprocessing. The bankwonbymaintain- ing its relationship with the business owner and retaining his wealth management, trust, and real estate business. The SBA is here to help your organization find solutions for its high-growth customer’s capital needs. Consider the SBA your partner in helping high-growth businesses in your community grow locally and internationally. For more information on SBA’s many finance programs, please visit us at www.sba.gov. n Bryson Patterson is SBA Export Finance Specialist. His office is in Denver at the US Export Assistance Center. He assists lenders and small businesses to access SBA export loan programs including the Export Working Capital Program. The bank was able to provide a total of $7 million in credit, which supports $80 million in annual revenue, with only $2.5 million exposure. DANI GORDEN Advertising Sales 801.676.9722 dani@thenewslinkgroup.com WORDS.