In May 2014, the US Department of Agriculture announced that US agricultural exports were likely to reach nearly $150 billion that year, supporting over a million jobs in the US. That’s good news for US farmers and the US balance of trade, and it’s also good news for many US export companies. Often overlooked in such reports is the key role that US export brokers play as the middleman in navigating and linking US agricultural producers to the global appetite for fresh, safe, US-grown farm products.
One such company is Freshworld Inc., a small business based in Union City, California, led by Eswar Angu. Angu recognized the growing demand for US fresh fruit, particularly apples, in India back in 2004 when he began doing market research in the sector. He has since put together a network of US growers and Indian food distributors and grown his business to include almonds, walnuts and pistachios sales as well.
Yet selling internationally can bring challenges. The lag time between buying materials, shipping them, and finally receiving payment can create a cash flow problem for companies like Freshworld. Since payment depends on foreign buyers, financing export transactions is sometimes perceived as more risky. Thus, a standard working capital credit line may not be available.
That’s where California Bank & Trust and the U.S. Small Business Administration (SBA) came into the picture. Working together using SBA’s Export Working Capital Loan Guarantee Program, California Bank & Trust began providing a line of credit to Freshworld in 2012, and as the company’s sales have grown so have their financing need. The bank was able to extend a new, larger line of credit to Freshworld in 2014 to boost the company’s cash flow further. “The SBA program helped our bank – which has both international banking and SBA expertise – set up a loan that was just what Freshworld needed,“ said California Bank & Trust’s Stella Jones.
The added working capital increased the company’s ability to make sales, and the company is now on track to achieve an export sales level that is nearly three times what it was in 2011. The California Bank & Trust loan “is helping us to go to the next level,” said Angu.
SBA is eager to support US exporters who are entering or building their international business. “Exporting is an opportunity for small businesses as well as large ones,” said Jeff Deiss, SBA’s regional export manager, “and SBA has loan guarantees designed to make it easier for small exporters to get the financing they need.”