By Dan McCue
Staff Writer

BB&T Corp., already one of the region’s most active providers of loans to small businesses entering the export market, is hiring a South Carolina coordinator in a bid to expand its export-related transactions.

“We had a great year in 2005, doing about $10 million in export finance transactions,” said Bill Browning, senior vice president for BB&T’s international banking services.

“This year our hope and expectation is that we’ll be able to build significantly on that work by having a local point of contact for South Carolina businesses that have had an interest in exporting but don’t currently know how to pursue it,” he said.

The new export representative will likely be headquartered in Columbia to facilitate easy access to potential exporters throughout the state but will probably spend a nearly equal amount of time in the Lowcountry, Browning said. BB&T currently has 90 branches in South Carolina, including nine in Charleston.

“People in the region extending roughly from I-95 eastward seem particularly excited by the potential and opportunities they perceive in exporting,” he said, suggesting that the new South Carolina representative will spend time on the road.

The footprint of the Winston-Salem, N.C.-based financial institution extends from Baltimore, Md., down to Fort Lauderdale, Fla., but the company has a decentralized management structure that conforms to its stated philosophy of keeping decision-makers close to the customer’s activities.

BB&T’s individual loans to small South Carolina businesses stepping into the export market have ranged from $250,000 to more than $3.5 million.

Browning joined BB&T in 1999 expressly to develop programs to help small business get involved in exporting.

His passion and interest in international trade, as well as his love of getting small businesses involved in it, stems from his job with the Export-Import Bank of the United States shortly after leaving graduate school, he said.

For those who are unfamiliar with the “Ex-Im Bank,” the name is actually something of a misnomer. It guarantees loans by other financial institutions rather than loaning money itself. Also, its protections only extend to supporting export activity, Browning said.

It was chartered as a government corporation in an effort to induce commercial banks to get involved in the somewhat risky international finance market, rather than sticking solely to safer investments, like providing home mortgages.

“Basically, Ex-Im exists to provide commercial banks with protection of their position in an international trade deal,” Browning said.

When Browning joined the company, BB&T was heavily involved in helping smaller, family-owned businesses secure U.S. Small Business Administration loans. It was while conducting those transactions that bank officials recognized a growing interest in exporting among small businesses, “particularly around Charleston and the port,” Browning said.

How the process works

A typical transaction begins with a small business bringing BB&T a purchase order or letter of credit from a foreign company, Browning said.

“They’ll say something like, ‘We’ve cut this great order, but now we need the money to build it, design it or ship it,’” Browning said.

His job at that point is to look at the transaction, the methodology and find a way to build a working capital platform.

“Typically, we want to first understand the deal. Then we want to know how you plan to execute it and what the costs and funding needs will be,” Browning said.

“Based on that information, if it’s a small loan, we’ll typically ask for some basic financial information about the business. If it’s a more substantial loan, we’ll ask for the last two years of financial data on the company.”

The most challenging aspect of his job, Browning said, is when a small business presents him with the makings of a great deal, evidence of a great opportunity, but he finds the company is not yet financially strong enough to stand up to a reasonable analysis of its performance.

In one case last year, the bank was approached by a pair of partners who had left a large company and were starting a small business in the same field with the intent of exporting goods.

“The guys really knew their stuff. They had great Rolodexes. But in the end, I just couldn’t finance them because they hadn’t demonstrated that their company was strong enough to stand independently,” he said.

After a loan is approved, BB&T makes its money back by billing the purchasing company overseas.

“At that end of the deal, we’re kind of like a collection service,” Browning said. “That’s why we want to understand the performance risk. Because we can’t collect anything if you don’t deliver the goods.”

Because of the high volume of export-related transactions BB&T performs, two to three a month as opposed to the two to three a year other banks typically process, the Ex-Im Bank guarantees anywhere from 75% to 90% of its principle, Browning said.

“Repetition tends to build confidence in program delivery,” he said.

In fact, based on BB&T’s track record in the export arena, the Ex-Im Bank has designated it a delegated authority lender, effectively agreeing to sign on to any deal the bank deems worthy up to an amount of $3.5 million.

Helping companies statewide

In the past year, BB&T provided a number of loans to companies shipping goods through the Port of Charleston to ports overseas.

One company, Cedar Enterprises, based in Greer, exports brake fluid to Saudi Arabia and other Middle Eastern countries. Another company, based in Spartanburg, is creating a line of products from recycled plastics for buyers in the Philippines.

Armed with a BB&T loan, Hampton-based Coastal Technologies is building a soot scrubber system that will remove heavy metals from the smoke released by coal-fired generator plants.

BB&T’s biggest export loan last year, $3.5 million to the Owen Steel Co. Inc. of Columbia, is allowing the company to fabricate the steel frame for an 11-story office tower in Trinidad.

Browning said he hopes to make an announcement soon about a Charleston textile company that is exporting goods to Mexico.

“If we can capture their Mexico business, it’ll be a powerful start to the new year,” he said.

Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.

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