Indian exporters entering the US market face a fundamental cash flow challenge: your costs are incurred months before your US revenue arrives. Whether you are shipping inventory to Amazon FBA warehouses, stocking a US distributor, or fulfilling orders from US retailers, the working capital gap is real and significant. Indian bank financing does not solve this because the funds need to be deployed in dollars, in the US, against US-domiciled assets.
Common financing needs
Inventory financing for FBA/warehouse: You need to pre-ship 3-6 months of inventory to US warehouses before sales begin. For a product line doing $500K annually, that is
25K-$250K tied up in inventory at any given time.
Accounts receivable financing: US retailers and distributors pay on Net-30 to Net-90 terms. If you are shipping
00K/month to US buyers, you could have
00K-$300K locked in unpaid invoices at any time.
Working capital for US operations: Rent for warehouse space, US staff salaries, marketing spend, freight and last-mile delivery costs, insurance, and compliance fees. All payable in USD from a US bank account.
Equipment financing: Packaging equipment, quality testing devices, warehouse racking, forklifts. Capital expenditure needed if you operate your own US fulfillment.
SBA (Small Business Administration) Loans
SBA loans are the gold standard of US small business financing. Low interest rates, long repayment terms, and government backing that makes lenders more willing to extend credit. However, eligibility for foreign-owned businesses has specific requirements that most Indian exporters need to plan around.
SBA 7(a) Loan
The most versatile SBA loan program. Loan amounts up to $5 million , with terms up to 25 years for real estate and 10 years for working capital and equipment. Interest rates are typically Prime + 1.5% to 3.75% (currently around 10-12% in 2026). Can be used for working capital, inventory, equipment, debt refinancing, or business acquisition.
Eligibility for foreign-owned businesses: The SBA requires the business to be at least 51% owned by US citizens or lawful permanent residents for most lenders. However, some SBA 7(a) lenders will work with businesses owned by individuals on E-2 (investor), L-1 (intracompany transfer), or H-1B visas. The key requirement is that the business must operate in the US and create US jobs. If your Indian company owns a US subsidiary, the subsidiary can potentially qualify if a US-based individual (citizen or LPR) holds the majority ownership stake.
SBA 504 Loan
Designed specifically for fixed-asset purchases. Real estate and heavy equipment. Loan amounts up to $5.5 million (up to
6.5 million for certain energy projects). The structure involves a bank providing 50%, a Certified Development Company (CDC) providing 40% (the SBA portion), and the borrower contributing 10% down. Fixed interest rates on the CDC portion make this attractive for warehouse or facility purchases. Same ownership eligibility constraints as 7(a).
SBA Microloans
Amounts up to $50,000 , provided through SBA-designated intermediary lenders (usually nonprofit community lenders). Terms up to 6 years. Interest rates typically 8-13%. Easier eligibility requirements than 7(a). Some microloan intermediaries work with immigrant entrepreneurs regardless of citizenship status. Good for initial working capital when establishing US operations.
Traditional Bank Lending
US commercial banks offer lines of credit, term loans, and trade finance facilities to businesses operating in the US. For foreign-owned companies, the path to bank lending is harder but not impossible.
What banks look for
US revenue history: At least 2 years of US operating history with audited financials. Banks want to see consistent revenue, not just a projection.
Personal guarantee: All owners with 20%+ stake must provide a personal guarantee. For Indian owners, this means your personal assets (including those in India) may be at risk.
Collateral: US-based assets. Inventory, accounts receivable, equipment, real estate. Banks strongly prefer US-domiciled collateral. Cross-border collateral (Indian assets) is possible but adds significant legal complexity.
Business credit score: A D&B (Dun & Bradstreet) PAYDEX score of 75+ and a business credit history. New US entities start with no score.
Personal FICO score: The US-based signer needs a personal credit score of 680+ for most commercial banks. Foreign nationals may not have a US credit file at all.
Indian bank US branches
Banks like State Bank of India (New York, Chicago, Los Angeles), Bank of Baroda, and Bank of India have US branches that are specifically equipped to work with Indian-owned businesses. They understand Indian corporate structures, accept Indian parent company guarantees more readily, and can facilitate cross-border collateral arrangements. Typical line of credit:
00K-$2M against a combination of US receivables and an Indian parent guarantee or SBLC (Standby Letter of Credit).
Asset-Based Lending (ABL)
Asset-based lending is often the most accessible form of US debt financing for Indian exporters because the lending decision is based on the value of your US assets, not your credit history or how long you have been in business. If you have inventory in a US warehouse and receivables from US buyers, you can borrow against them.
How ABL works
Asset Type
Typical Advance Rate
How It Is Valued
Accounts receivable
80-90% of eligible AR
Current invoices under 90 days, from creditworthy US buyers
Inventory
50-70% of net orderly liquidation value
Third-party appraisal; finished goods valued higher than raw materials
ABL facilities are revolving. As you ship more products and generate new receivables, your borrowing capacity increases. As receivables are collected and inventory is sold, the line adjusts down. Interest rates are typically Prime + 2% to 5% (12-15% in 2026), higher than traditional bank loans but with much easier qualification. ABL lenders include specialty firms like CIT Group, Wells Fargo Capital Finance, PNC Business Credit, and White Oak Commercial Finance .
Revenue-Based Financing
Revenue-based financing (RBF) is a newer form of funding where you receive a lump sum and repay it as a fixed percentage of your monthly revenue until the total repayment amount is reached. No fixed monthly payments, no equity dilution, and minimal credit history requirements. The lender underwrites based on your revenue data, not your credit score.
How it works
You connect your US bank account, payment processor (Stripe, PayPal, Amazon Seller Central), and accounting software to the RBF provider. They analyze your revenue patterns and make an offer. Typically 1x to 3x your average monthly revenue . You repay by having a fixed percentage (typically 6-12% of monthly revenue) debited automatically until you have repaid 1.2x to 1.5x the original amount. The total cost of capital works out to roughly 15-30% annualized , depending on how fast you repay.
Key providers
Clearco: Focused on e-commerce and SaaS. Offers up to
0M. Requires minimum
0K/month in revenue. Repayment as a percentage of revenue. No personal guarantee required.
Pipe: Treats your recurring revenue as an asset and advances capital against it. Best for SaaS and subscription-based businesses. Advances up to 50% of ARR.
Capchase: Similar model, focused on B2B SaaS with US revenue. Non-dilutive, no personal guarantee, no board seat. Typical terms: 6-12 month repayment.
Wayflyer: E-commerce focused. Analyzes your Amazon, Shopify, and ad spend data to underwrite. Offers up to $20M. Particularly popular with cross-border e-commerce sellers.
Invoice Factoring in the US
Invoice factoring is one of the most practical financing tools for Indian exporters selling to US businesses on credit terms. You sell your unpaid US invoices to a factoring company, get cash upfront (80-95% of the invoice value), and the factor collects payment from your buyer.
Factoring vs invoice financing
Feature
Invoice Factoring
Invoice Financing
Who collects from buyer
The factor (your buyer pays them directly)
You (the lender uses invoices as collateral)
Buyer awareness
Buyer knows (notification factoring) or may not know (non-notification)
Buyer typically does not know
Advance rate
80-95% of invoice value
80-90% of invoice value
Cost
1-5% of invoice per 30 days
1-3% of invoice per 30 days
Credit decision based on
Your buyer's creditworthiness
Your creditworthiness + invoices
Key US factoring providers
BlueVine: Online factoring up to $5M. Advance rates of 85-90%. Approval in 24 hours based on bank statements and invoice data. No minimum credit score requirement.
Fundbox: Invoice financing up to
50K for smaller businesses. Connects to your accounting software (QuickBooks, Xero) and makes offers based on outstanding invoices. Repayment over 12 or 24 weeks.
altLINE (by Southern Bank): Traditional factoring by a bank-owned factor. Specializes in manufacturing, distribution, and import/export businesses. Advance rates of 85-95%. Works with foreign-owned US entities.
Triumph Financial: Large-scale factoring for importers and distributors. Facilities up to $50M. Experience with cross-border trade receivables. Requires a US entity and US-domiciled receivables.
Amazon Lending & Shopify Capital
If you sell through Amazon US or Shopify, the platforms themselves may offer you financing based on your sales history. This is the lowest-friction path to capital. No external applications, no credit checks, and repayment is deducted automatically from your payouts.
Amazon Lending
Invitation-only: Amazon pre-qualifies sellers based on sales volume, account health, customer metrics, and selling history. You will see a lending offer in your Seller Central dashboard if eligible.
Loan amounts:
,000 to $750,000. Term loans with fixed monthly payments over 3-12 months.
Interest rates: Typically 6-16% APR, significantly lower than most alternative lenders.
Repayment: Fixed amounts deducted from your Amazon payouts every two weeks. If payouts are insufficient, Amazon debits your linked bank account.
Eligibility for Indian sellers: Available to Amazon Global Selling participants with a US account. Typically requires 12+ months of consistent sales and good account health.
Shopify Capital
Similar model to Amazon Lending but for Shopify store owners. Offers merchant cash advances and loans from $200 to $2 million . Repayment is a fixed percentage of daily sales (for cash advances) or fixed daily/weekly amounts (for loans). Eligibility is based on Shopify sales history, with no personal credit check. Available to Shopify merchants in the US with consistent sales volume.
Trade Credit & Supplier Financing
Trade credit is the most underappreciated form of financing for businesses entering the US market. When a US supplier gives you Net-30 or Net-60 payment terms, they are effectively lending you money interest-free for that period. Building trade credit relationships is both a financing strategy and a credit-building strategy.
Standard US trade credit terms
Terms
Meaning
Effective Cost
Net-30
Full payment due within 30 days
Free (0%)
Net-60
Full payment due within 60 days
Free (0%)
Net-90
Full payment due within 90 days
Free (0%)
2/10 Net-30
2% discount if paid within 10 days, otherwise full amount in 30 days
~36% APR if you skip the discount
Supply chain financing programs
Large US buyers like Walmart, Costco, and Home Depot offer supply chain financing (also called reverse factoring) programs through their banking partners. If you are an approved vendor, the buyer's bank pays you early (within 5-10 days of invoice approval) at a small discount, and the buyer pays the bank on their normal terms. The discount rate is based on the buyer's credit rating (not yours), so it is typically very low. 2-4% annualized . Ask your US buyer if they participate in such a program.
Export-Import Bank of the United States (EXIM)
The US EXIM Bank supports US exports by providing financing and insurance. While it primarily benefits US exporters, Indian importers/exporters can benefit indirectly through several programs that reduce the cost and risk of US-India trade.
Programs relevant to Indian exporters with US operations
Working Capital Guarantee: EXIM guarantees working capital loans made by commercial banks to US exporters. If your US subsidiary exports American-made components or products (including re-exports), it may qualify. The guarantee covers 90% of the loan, making banks more willing to lend. Loan amounts up to
0 million.
Export Credit Insurance: EXIM offers insurance that protects US exporters against foreign buyer non-payment. If your US entity sells to international buyers (including back to India or to other markets), this insurance covers commercial and political risk. Premiums are typically 0.5-1.5% of invoice value.
Supply Chain Finance Guarantee: EXIM can guarantee financing for US suppliers in your supply chain, enabling them to offer you better payment terms because their receivable from your US entity is EXIM-guaranteed.
Cross-Border Financing Challenges
Borrowing in the US as an Indian company involves navigating regulations on both sides. FEMA and RBI regulations in India, and US lending laws in the US. Getting this wrong can result in penalties, forced repayment, or regulatory action.
FEMA restrictions on borrowing abroad
Under the Foreign Exchange Management Act (FEMA), an Indian company borrowing directly from a foreign lender must comply with the External Commercial Borrowing (ECB) framework . This imposes restrictions on:
Minimum maturity period: ECBs generally require a minimum average maturity of 3-5 years depending on the amount and the nature of the borrower.
All-in-cost ceiling: The total borrowing cost (interest + fees) cannot exceed RBI's prescribed ceiling, currently benchmarked to SOFR + 450 bps for ECBs up to $50M.
End-use restrictions: ECB funds cannot be used for certain purposes including real estate, equity investment, or on-lending. Working capital and general corporate purposes have specific conditions.
Reporting requirements: Monthly ECB-2 returns to RBI, Form 83 filing, and compliance reporting throughout the loan tenure.
The US subsidiary route (ODI)
The cleaner approach is to set up a US subsidiary through the Overseas Direct Investment (ODI) route under FEMA. Once the Indian parent has made its equity contribution to the US subsidiary (with RBI approval or under the automatic route), the US subsidiary is a US entity that borrows in the US market on its own balance sheet. The US subsidiary's borrowings are not treated as ECBs of the Indian parent.
Key ODI requirements: the Indian parent must file Form ODI with the AD (Authorized Dealer) bank, the total ODI cannot exceed 400% of the Indian company's net worth (under the automatic route), and the Indian company must not be on any RBI caution list or defaulter list.
Parent company guarantees
When the US subsidiary borrows from a US lender, the lender may ask for a guarantee from the Indian parent. Under FEMA, an Indian company providing a guarantee for its overseas subsidiary's borrowing is permitted under the ODI regulations, but the guarantee amount counts toward the 400% net worth cap. The guarantee must be reported in the Annual Performance Report (APR) filed with RBI.
Setting Up a US Entity
Almost every US financing option requires a US-registered entity. No US lender, factor, or platform will extend credit to an Indian company without a US legal presence. Here is what you need to set up.
Strongly preferred by banks and institutional lenders
Tax treatment
Pass-through (to Indian parent. Complex international tax)
Corporate tax at entity level (21% federal), cleaner structure
Setup cost
$500-
,500
,000-$3,000
Annual compliance
Lower. Simpler reporting
Higher. Annual meetings, officer records, more filings
State of incorporation
State where you operate (Wyoming popular for cost)
Delaware (standard for institutional credibility)
Setup checklist
Entity registration: File articles of incorporation (C-Corp) or articles of organization (LLC) with the state. Use a registered agent service if you do not have a US address.
EIN (Employer Identification Number): Apply with the IRS using Form SS-4. This is your business tax ID, required for opening a bank account and applying for any financing. International applicants can apply by fax or phone.
US bank account: Open a business checking account. Mercury, Relay, and Brex are neobanks that work with foreign-owned US entities. Traditional banks (Chase, Bank of America) may require an in-person visit.
Operating agreement / bylaws: Document the ownership structure, management responsibilities, and capital contributions. Lenders will ask for this.
Beneficial Ownership Information (BOI) report: File with FinCEN as required under the Corporate Transparency Act. Discloses all beneficial owners with 25%+ ownership.
Building US Business Credit
US lenders rely heavily on credit scores. Both business and personal. A foreign-owned company starts with no US credit history, which is why most traditional lenders say no. Building credit takes 6-12 months of deliberate effort, but it unlocks access to cheaper, larger financing.
Step-by-step credit building
Step 1
Get a D-U-N-S Number
Apply for a free D-U-N-S number from Dun & Bradstreet. This is the unique identifier for your business in the US credit system. Without it, you have no business credit file. Apply at dnb.com. It takes 30 days for a free application, or you can pay for expedited processing (5 days).
Step 2
Open Net-30 Trade Credit Accounts
Several US suppliers specifically cater to new businesses building credit and report payment history to Dun & Bradstreet. Open accounts with companies like Uline (packaging supplies), Quill (office supplies), Grainger (industrial supplies), or Strategic Network Solutions. Make purchases and pay on time (or early). You need at least 3-5 reporting trade lines to establish a PAYDEX score.
Step 3
Get a Business Credit Card
Apply for a secured business credit card (Brex, AMEX Business, or a bank secured card). Use it for regular business expenses and pay the full balance monthly. Brex does not require a personal guarantee or personal credit check, making it accessible to foreign founders. After 6-12 months of on-time payments, your business credit profile strengthens.
Step 4
Monitor and Maintain
Check your D&B PAYDEX score quarterly. Target a score of 80+ (pays on time or early). Also register with Experian Business and Equifax Business for broader credit visibility. Ensure all your US vendors and suppliers report your payment history. After 12 months with a PAYDEX of 75+, you qualify for significantly better financing terms from traditional lenders.
Financing Options. Side-by-Side Comparison
Every product has trade-offs. Use this table to narrow down which financing options fit your situation, then pursue 2-3 in parallel.
Product
Typical Rate
Amount Range
Timeline to Fund
Best For
SBA 7(a)
Prime + 1.5-3.75%
Up to $5M
60-120 days
US-owned entities needing long-term capital
Bank line of credit
Prime + 1-3%
00K-$5M
30-90 days
Established US operations with 2+ years history
Asset-based lending
Prime + 2-5%
$250K-$50M
30-60 days
Importers/distributors with US inventory and AR
Revenue-based financing
15-30% effective APR
0K-$20M
1-3 days
E-commerce / SaaS with consistent US revenue
Invoice factoring
1-5% per 30 days
$25K-$50M
3-7 days
B2B sellers with creditworthy US buyers
Amazon Lending
6-16% APR
K-$750K
1-5 days
Amazon sellers with 12+ months history
Shopify Capital
10-17% flat fee
$200-$2M
1-3 days
Shopify store owners with sales track record
Trade credit
0% (if paid on time)
Varies by supplier
Immediate (once approved)
All businesses; doubles as credit-building tool
EXIM working capital guarantee
Bank rate + 1.5% guarantee fee
Up to
0M
45-90 days
US entities that also export from the US
Frequently Asked Questions
Can a foreign-owned company get an SBA loan in the US?
Yes, but with conditions. The business must be a US-registered entity, operate in the US, and be at least 51% owned by US citizens or lawful permanent residents for most SBA programs. However, SBA 7(a) loans may be available if the foreign owner holds a valid US work visa (E-2, L-1, H-1B) and the business creates US jobs. Some SBA lenders work with foreign-owned companies on a case-by-case basis when the business has strong US revenue and collateral.
What is the minimum US credit history needed to get a business loan?
Most traditional US banks require at least 2 years of US business credit history and a personal FICO score above 680. However, alternative lenders, asset-based lenders, and revenue-based financing providers may work with companies that have as little as 6-12 months of US revenue history. Building a D-U-N-S number and establishing trade credit lines early is essential for foreign-owned companies entering the US market.
How does invoice factoring work for Indian companies selling in the US?
You sell your unpaid US invoices (accounts receivable) to a factoring company at a discount, typically receiving 80-95% of the invoice value upfront within 24-48 hours. The factor collects payment from your US buyer and remits the remaining balance minus their fee (1-5% per month). This is particularly useful for Indian exporters with large US buyers who pay on 30-60 day terms, as it eliminates the working capital gap without requiring US credit history.
What are the FEMA restrictions on an Indian company borrowing in the US?
Under FEMA, an Indian company borrowing directly from a US lender falls under the External Commercial Borrowing (ECB) framework, which has restrictions on end-use, minimum maturity periods, and all-in-cost ceilings. However, if the Indian company sets up a US subsidiary through the ODI route with RBI approval, the US subsidiary borrows as a US entity and ECB restrictions do not apply to the subsidiary's borrowings. The subsidiary's debt sits on its own balance sheet. For more on FEMA compliance, see our common FEMA violations guide.
Should I set up an LLC or C-Corp in the US for financing purposes?
For financing purposes, a C-Corp is generally preferred because most institutional lenders, SBA programs, and venture debt providers are more comfortable with the C-Corp structure. C-Corps also make it easier to issue equity later. However, an LLC with a single Indian parent offers simpler tax treatment and lower compliance costs. If your primary goal is accessing US debt financing at scale, a Delaware C-Corp is the standard choice. For smaller operations focused on trade credit and invoice factoring, an LLC works fine.
Can Indian exporters selling on Amazon US access Amazon Lending?
Yes, but Amazon Lending is invitation-only. Amazon evaluates your selling history, sales volume, customer metrics, and account health. Typically, you need at least 12 months of consistent sales with good account standing. Loan amounts range from
,000 to $750,000 with terms of 3-12 months and interest rates of 6-16% annually. Amazon deducts repayments directly from your seller payouts.
What collateral do US banks require from foreign-owned companies?
US banks typically require a personal guarantee from all owners with 20%+ stake, plus business assets as collateral (inventory, accounts receivable, equipment, or real property). For foreign-owned companies without US real estate, banks usually take a blanket lien on all business assets (UCC filing) and may require a larger cash deposit or standby letter of credit from the Indian parent company.
How long does it take to get approved for US business financing?
Timelines vary significantly by product. Invoice factoring: 3-7 days. Revenue-based financing: 1-3 days. Amazon/Shopify lending: instant if pre-approved. Traditional bank lines of credit: 30-90 days. SBA loans: 60-120 days. Asset-based lending: 30-60 days. For foreign-owned companies, add 2-4 weeks for additional due diligence on the parent entity and ownership structure.