Press release BoxID: 452479 (Patton Electronics Company)
  • Patton Electronics Company
  • 7622 Rickenbacker Drive
  • 20879 Gaithersburg

Small firms have more options for exports

(PresseBox) (Gaithersburg, ) When Patton Electronics started manufacturing computer and telecommunications products in 1984, the Gaithersburg company sold most of its goods to local companies. That is, until the owners identified fertile ground abroad.

"We had the opportunity to discover customers internationally through the Internet and made some treks overseas to establish distributors," said Bobby Patton, who runs the business with his brothers Bruce and Bert. Full story:

Starting out, they relied on their own capital, but as the exporting operations grew, the brothers turned to the Export-Import Bank in 1998. The independent federal agency provided a guaranteed loan to help Patton Electronics finance accounts receivables from overseas customers.

Thanks to that line of credit, the 200-employee firm now draws more than 70 percent of its revenue from exporting more than 2,000 products to 120 countries. Patton said the company is on track to record a little less than 10 percent growth in the fourth quarter compared with last year because of an uptick in international orders.

Patton Electronics is among a growing number of small firms exploring global markets to sustain or expand their businesses amid sluggish demand at home. These companies have greater financing options now as the federal government increases grant funding and more banks are offering export loans.

According to the Bureau of Economic Analysis, total U.S. exports by companies of all sizes rose 15.1 percent to $178 billion in July, compared with the previous year. Small- and medium-size businesses, according to the International Trade Administration, account for roughly 33 percent of all U.S. exports.

Leading the charge in aiding mom-and-pop shops with exporting their goods are the Export-Import Bank and the Small Business Administration. Both agencies offer guidance on entering international trade and provide working capital loan guarantees to offset the risks of doing business abroad.

The Export-Import Bank has approved more than 2,828 small-business transactions through August, and is projecting a 10 percent increase from 2010 for the year. The agency has set atarget of adding 5,000 new small firms to its portfolio and hitting $9 billion in annual small-business export financing within the next four years.

"This is a record year for small-business loans at Ex-Im," said bank chairman and president Fred Hochberg. "The small businesses I've talked to that are exporting are having a good year, and are pretty optimistic in spite of a tough economy here and around the world."

SBA offers new grants

Meanwhile, the SBA announced last week $30 million in grants, authorized by the Small Business Jobs Act of 2010, to increase exporting under the State Trade and Export Promotion Program. Begun in March, the program supports participation in foreign trade missions, international marketing, trade shows and other export initiatives.

The grants support further development of state programs to increase the number of mom-and-pop shops doing business overseas, which aligns with President Obama's goal of doubling U.S. exports by 2014, said Dario Gomez, associate administrator for international trade at the SBA. (Maryland, which received $585,000, is one of 47 states awarded funding through the new grants.)

"In order to balance its overall GDP, the United States really needs to put a strong emphasis on exports," he said. "The Jobs Act gave us new tools towards that end."

The legislation, most notably, raised the loan limit from $2 million to $5 million, which Gomez anticipates will result in further export growth. He noted that the agency has welcomed more lending partners in recent years, though he could not provide an exact figure.

In the Washington area, there are five banks, including BB&T Corp. and Suntrust Bank, listed as preferred SBA export lenders. Suntrust, for instance, has in 2011 issued more than 14 times the number of export loans it did in 2008, according to Susanne Keough, managing director and head of global trade solutions for the Atlanta-based bank. She declined to provide an exact number.

"More clients are exploring international markets as a result of the slowdown in growth and demand in the U.S.," she said. "While the U.S. was in the midst of the recession, emerging markets, like China and India, presented great opportunities for U.S. products. It was just a matter, for many U.S. companies, of obtaining the right financing."