SBA STEP Program Helps Small Businesses with Exporting

Improving the SBA STEP Program

Small businesses earn trillions for the U.S. economy. And they employee tens of millions of people too. But when it comes to exports they face an uphill climb.

Luckily a government program seeks to help small businesses. The State Trade and Expansion Program (STEP) offers money and assistance to help small businesses become exporters.

Democratic Rep. Abby Finkenauer from Iowa held a recent hearing to try to tweak the program. Finkenauer now serves as Chairwoman of the Small Business Subcommittee on Rural Development, Agriculture, Trade, and Entrepreneurship.

Congress launched STEP after the global financial crisis.

Congress Seeks to Help Small Business Exporting

The hearing looked at the tough times small businesses face in the export market. It also focused on businesses in rural areas.

In a press release, Finkenauer said, “I … know that it is incredibly difficult for the small business in a town like Maquoketa in my district whose owner may want to do business overseas but lacks the staff capacity or doesn’t know where to start. Today’s hearing was a chance to hear how we as lawmakers can ensure our small businesses have these opportunities.”

The hearing looked at problems the program already faces. But officials also tried to seek ways to improve it. The Small Business Administration Inspector General made some suggestions for improvements. And the Government Accountability Office made suggestions too.

Recommendations from Kimberly Gianopoulos, Director of International Affairs and Trade for the Government Accountability Office include some of the following.

Gianopoulos urged the SBA to assess the risk to achieving program goals posed by some states’ low grant fund use rates.

And she recommended examining the challenges that states reported related to the program’s application, award processes, administrative burden, and communication.

Finally, Gianopoulos suggested the SBA enhance collection and sharing of best practices among states that receive STEP grant funds.

The SBA STEP Program

The Small Business Jobs Act of 2010 created STEP.  It began with a three-year pilot program. The success of the program led Congress to move forward. And the Trade Facilitation and Trade Enforcement Act made STEP permanent in 2015.

Congress also authorized $30 million in funding through the Fiscal Year 2020. To date, the SBA has awarded around $139 million in funding to almost every state in the country.

STEP aims to increase the number of small businesses that export and the value of exports by the small business sector.

The Federal and state partnership competitively awards grants to the 50 states. Grants also go to the District of Columbia, Commonwealth of Puerto Rico, Virgin Islands, Guam, and American Samoa.

In addition to financial contribution, the program also supports small businesses with trade goals outside of the US. These include trade missions and market sales trips. But they also include export trade show exhibits, training and subscription to services provided by the Department of Commerce.

The Federal government provides 75% of the funding for the total project. And states provide 25% of the cost for operating.

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