This article was first published on the U.S. Small Business Administration’s website. Read the original post here.
In April, as other U.S. businesses dealt with the challenges posed by COVID-19, Gap Engineering of Houston, Texas secured a $4.5 million Export Working Capital Program (EWCP) loan, making possible SBA’s largest export deal in the last five years.
SBA’s EWCP loan provides up to $5 million in short-term, transaction-specific working capital loan guarantees to U.S. small business exporters. Loans guaranteed under this program can be used for pre-export financing of labor and materials and post-shipment financing of the accounts receivable generated from transaction-specific overseas sales.
Gap Engineering is a small business that provides engineering services across the United States and around the world. Born from founder Mike Homma’s vision to create an automation engineering company, Gap Engineering uses innovation to change the way automation projects are delivered and used by their clients. The company now delivers turnkey civil and mechanical construction projects for both the private and public sectors.
The EWCP loan allowed Gap Engineering to compete and secure a large contract for engineering services with the Government of Ghana. Through their services, Gap Engineering will refurbish four water plants and construct two new water plants. These water plants will help Ghana meet critical infrastructure needs for decades to come.
SBA’s EWCP product represented a brand-new credit facility for Gap Engineering.
This credit solution, supporting their project in Ghana, is not only specific to this deal but will open the doors to future orders. Previously, Gap Engineering was forced to wait for cash generation from various phases of a job before staffing up and then proceeding to execute a contract.
If a contract was significant and required too many orders, Gap Engineering could not accept the job. The EWCP’s functionality allows for pre-shipment financing, meaning Gap Engineering can purchase supplies, pay their vendors, and staff up for various jobs upon the award of a viable contract, and move forward right away to execute it.
Gap Engineering’s EWCP loan will not only benefit the United States through job creation and growth, it will have a significant positive impact on the people of Ghana. The contract stands to create upward of 200 jobs in Ghana in the near-term, with the possibility of 1,000 jobs in the long-term, in addition to building critical technical skills among Ghanaians.
“I applaud Mike Homma and his Gap Engineering Team,” said Loretta Greene, SBA Associate Administrator for International Trade. “Prosper Africa is a priority of the Trump Administration and this is the type of partnering that not only benefits our U.S. economy but helps with critical water sustainability for the people of Ghana.”