MD Receives Federal Grant to Help Small Businesses Reach Foreign Markets
WASHINGTON — Senate Committee on Small Business and Entrepreneurship Ranking Member Ben Cardin (D-Md.) today issued a statement lauding a U.S. Small Business Administration (SBA) announcement that the State of Maryland was awarded a $550,000 State Trade Expansion Program (STEP) grant. The state will use the grant to connect Maryland small businesses with international trade missions.
More than 50 Maryland small businesses take advantage of STEP-funded export promotion activity each year, which has resulted in more than $50 million in confirmed sales. During a Small Business Committee hearing on trade in April, committee members heard testimony from BAON Enterprises, a woman-owned small business based on the Eastern Shore of Maryland, whose first international sale was made possible on a STEP-funded trade mission in 2017.
“Many Maryland small businesses make products that would be in high demand abroad, but they are unable to take advantage of these opportunities because they lack the trading contacts and technical know-how to expand into international markets on their own,” said Ranking Member Cardin. “With this investment from SBA, Maryland agencies will have the resources they need to help small businesses develop the relationships and expertise they need to export their products and services.”
With their narrower margins and smaller staffs, small businesses often struggle to navigate international markets, which represent 95 percent of all global consumers. The struggles small businesses face explain why only one percent of the 30 million small businesses in America export their products.
Congress created STEP in 2010 to increase opportunities for small businesses to engage in international trade. The program awards grants to state economic development agencies so they can help small businesses attend international trade shows and connect with customers in foreign markets. The grants also allow economic development agencies to provide counseling and training to help small businesses understand the rules of international trade.
In addition to STEP, SBA helps small businesses enter international markets through the following programs:
- The Export Express Loan Program, which provides loans of up to $500,000 to small businesses that are in the early stage of the exporting process.
- The Export Working Capital Program, which provides loans of up to $5 million to small businesses to cover the cost of international purchase orders. The loans allow small businesses to expand into international markets without disrupting their domestic financing and business plan.
- The International Trade Program, which provides loans of up to $5 million to small businesses that regularly engage in international trade so they can expand their production capacity.
In total, the programs led to $3.1 billion in export sales for small businesses in Fiscal Year 2018. STEP is especially successful, with a recent performance report finding that the program generated more than $500 million in export sales and assisted more than 7,000 small businesses nationwide. The report also found that STEP returns more than $31 in sales for small businesses for every dollar invested in the program.
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