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West Virginia Company Utilizes SBA Export Working Capital Program To Expand Despite Economic Downturn
Tucked away in the hills of Parkersburg West Virginia, Rolling Ridge Woods exports logs and lumber from the heart of the Appalachian region to countries all over the world.
Eugene Walters, the General Manager, credits the Small Business Administration’s (SBA) Export Working Capital Program for keeping the company in business when the economy was in a recession. “We are deeply tied to the housing market and when the housing market took a hit, business was tough for a few years,” Walters said.
Although a forester by trade, Walters’ business sense is second to none. While attending a West Virginia Development Office meeting, Walters had a casual conversation with Leslie Drake from the US Export Assistance Center that may have saved the company.
Drake recommended the SBA Export Working Capital Program to help Walters shorten the payment cycle between the delivery of the goods and the payment for the product. “Because of the Export Working Capital Program, we have been able to tighten our export payment cycle from about six weeks to pretty much immediately,” said Walters. By freeing up valuable working capital, Walters is able to build the business and process additional international orders.
With the addition of exporting, Rolling Ridge Woods weathered the housing market downfall and was able to expand. When the company started out in 2002, 90 percent of their business was domestic. With SBA’s help, the company now does 60 percent of their business in direct export, 10 to 15 percent in indirect export, and the remaining in domestic business.
Not only did the increase in exporting help Rolling Ridge Woods, it also provided economic stimulus in the region through the local independent loggers and sawmills.
“Exporting is a great option for small businesses, like Rolling Ridge Woods, who are looking to increase sales and profits,” said Regional Administrator Natalia Olson-Urtecho. “The SBA provides counseling, training, and capital to help support small business in exporting opportunities.”
Companies, like Rolling Ridge Woods, are able to work directly with their community lenders. SBA provides the lenders with up to a 90 percent guarantee on export loans as a credit enhancement, so they are able to make the necessary export working capital available.
“There are programs, like the ones offered by the SBA, out there to help small businesses to succeed,” Walters said. “What I really want to tell the small guys like us, who maybe think they don’t need government assistance, is that this is not a handout. This program is structured to allow small businesses to utilize the local community bank’s money and the government will guarantee it.”