Financial seminar maps trail through export market maze

— Businesses exporting goods and services must tackle additional financing issues such as a longer cash-flow cycle and finding a bank willing to support overseas activity.

Small- and medium-sized business owners can secure help navigating the system through many agencies, including the Export-Import Bank of the United States and The U.S. Small Business Administration.

Representatives from both government agencies spoke to Northwest Arkansas business owners and bankers Wednesday at an International Trade Finance seminar hosted by the Arkansas U.S. Export Assistance Center and the Arkansas DistrictExport Council, in conjunction with the Arkansas World Trade Center.

“Trade finance is one of the scariest aspects of foreign trade,” said Graham Catlett, chairman of the Arkansas District Export Council. “We all want to get paid.”

Bill Moore, marketing director for Respirometer Systems and Applications based in Fayetteville, attended the seminar to learn how his company can increase exports.

“We are a small business but we are trying to grow the economy,” he said. “There are some good programs out there and people need to take advantage of them.”

The company designs and manufactures products used to assess wastewater treat-ment and diagnose wastewater and treatment problems. Close to 20 percent of Respirometer Systems and Applications business comes from international markets, Moore said.

The Export-Import Bank does not compete with private sector lenders but provides export financing products that fill gaps in trade financing.

Kelly Kemp, business development officer for the bank’s North Texas Branch that includes Arkansas, said the federal program assumes credit and country risks that the private sector is unable or unwilling to accept.

“We are here to minimize risk, provide a marketing advantage and supplement commercial financing,” he said.

Kemp said no business is too small and, on average, 85 percent of the bank’s transactions directly benefit small U.S. businesses.

“It’s all about helping companies grow,” he said.

Short-term credit insurance allows exporters to offer competitive credit terms to foreign buyers and obtain additional financing. This typically involves amending a company’s domestic line of credit.

Insurance protects a business from commercial and political risks of doing business outside the country.

The Small Business Administration also provides counseling, training and financing programs supporting small business exports.

Pellson Lau, regional manager of the U.S. Small Business Administration’s Office of International Trade in New Orleans, said small businesses need to be looking globally as nearly 96 percent of consumers and more than two-thirds of the world’s purchasing power is found outside the United States.

“The earlier you can engage us the better,” he said.

Dan Hendrix, president and chief executive officer for the Arkansas World Trade Center, said sessions such as Wednesday’s seminar help Northwest Arkansas businesses grow.

A step-grant the center received from the Small Business Administration helped 25 companies last year, Hendrix said. The group received the grant again this year and a new round of funding began Oct. 1.

“We are able to assist Arkansas-qualified companies go to trade mission and trade fairs,” he said. “The grant helps offset some of the expenses.”

The Arkansas World Trade Center programs also help reach a goal laid out by President Obama in his 2010State of the Union address to double U.S. exports by the end of 2014. One focus of the National Export Initiative is increase access to credit for small- and medium-sized businesses.

Arkansas exports were up 36 percent in the third quarter compared with the same time a year earlier, Hendrix said.

Last year Northwest Arkansas companies exported $428 million of merchandise, according to the International Trade Administration. The state’s total exports in 2011 totaled $5.6 billion.

Business, Pages 23 on 11/08/2012

Upcoming Events