OPIC Improves Access to Trade Finance for Small Companies

If you are a small American company seeking to open a foreign sales office, purchase a foreign distributorship, or buy a foreign warehouse — especially one in a developing country — it can be tough to find financing in the U.S. That’s where the Overseas Private Investment Corporation comes in. And why a recent change at OPIC is good news.

OPIC is a federal agency. Its job is to help facilitate foreign deals like these that benefit American companies and developing countries, but that would not happen without OPIC’s help. In recent years, OPIC’s support for smaller U.S. companies has risen rapidly — from less than $5 million in transactions financed ten years ago to over $300 million last year. So rapidly, in fact, that OPIC realized it needed to delegate some of its lending authority to accommodate the demand. SBEA worked closely with OPIC in devising a strategy for this.

OPIC is now ready to expand further. The agency recently rolled out a new program to empower loan originators across the U.S. to put together small business transactions for OPIC. Called the Enterprise Development Network, the new program allows specially-selected loan originators to assemble small business financing packages for final approval by OPIC.

EDN will save small companies many trips to Washington, and will speed approval of OPIC transactions. To further expedite transactions, OPIC has allocated a $100 million loan fund to a designated bank — the Wells Fargo/HSBC Trade Bank in San Francisco — exclusively for smaller companies doing business with OPIC. Other banks are expected to follow the Trade Bank into the EDN Program later this year.

So the loan originators will be able to send your deal to the Trade Bank or another bank for a financial commitment even before the deal goes to OPIC for a sign-off.

This is huge breakthrough for small companies, and SBEA has publicly praised OPIC for doing it.

OPIC does operate under certain requirements, so companies that are interested in OPIC financing should review them on the OPIC web site. For example, no investment that OPIC helps underwrite can cost a single American job. And substantial participation by U.S. citizens (or permanent residents) is required for all such transactions.

To learn more about this promising new program for smaller American companies, go to:

http://www.opic.gov/doingbusiness/edn/index.asp