Small businesses constantly seek ways to grow their customer base. However, many don’t realize approximately 95 percent of their potential new customers live outside the United States.
Exporting has proven to have many benefits to both small businesses and the local economy. Small businesses that export to foreign markets sell more, support more jobs, and pay higher wages than small businesses that don’t export.
The Puget Sound region is the most trade-dependent region in the most trade dependent state in the U.S. where one in three jobs are tied to trade.
In fact, an estimated 390,690 U.S. jobs were supported by goods exported from Washington in 2014. And during that same year, the value of goods exported from Washington totaled $90.6 billion, up 206 percent since 2004.
Despite the economic benefits, there can be a sense of uneasiness or “fear of the unknown” when it comes to doing business overseas. That is why the U.S. Small Business Administration (SBA) focuses on three areas to help small business grow their business through exporting:
1. The SBA State Trade Expansion Program (STEP)
This month, small businesses in Covington, Maple Valley and across Washington will have access to $850,000 in funding to help them enter and compete in the global marketplace through the SBA State Trade Expansion Program (STEP), which supports activities to increase exporting by small businesses.
This is the fifth consecutive year the Washington State Department of Commerce has received SBA STEP funding. Washington is also one of a few states to receive the highest amount of funding available.
Whether it’s enabling a business owner to meet face-to-face with a buyer overseas or providing education on options for foreign financial transactions, the SBA STEP grant helps local businesses grow their customer base.
2. SBA International Trade Loan Guarantee Program
Many in the business community are familiar with the SBA Loan Guarantee Program, which provides a guarantee to lenders, mitigates their risk, and allows them to provide financing to small businesses in situations they wouldn’t be able to conventionally.
However, few people are aware of the SBA Export Loan Programs, which can have up to a 90 percent guarantee – the highest guarantee available on any SBA loan.
Options include the Export Working Capital Program, which offers financing up to $5 million as a credit enhancement; the Export Express Loan Program, the simplest export loan product that offers streamlined financing up to $500,000; or the International Trade Loan Program, which offers loans up to $5 million for fixed assets and working capital for businesses that plan to start or continue exporting.
3. Local Export Outreach Team
Our local SBA office – together with SBA Office of International Trade staff based in the Pacific Northwest – collaborate with local export resource partners as part of the Washington Export Outreach Team.
This group of government agencies and economic development partners work together to guide and support small businesses through every step of the exporting process.