A New Source of Funds for Exporters 

By: Robert Bellenir

Have you considered expanding your business through exporting products to countries such as Korea or China? Exporting can help your company access the 95 percent of consumers in the world that live outside the United States. Many developing countries have a growing middle class with a growing amount of disposable income. A company that has established a solid presence in the U.S. market should consider broadening its reach by exploring the potential of selling their products or services to foreign markets.

Exporting has many overall benefits.  The most obvious benefit being that it can provide a significant source of new revenue. However, for exporting to work for your small business, it must be made a high-level, strategic priority that requires much of your focus and resources.  Substantial human and financial resources must be allocated because exporting takes a commitment of time and effort and has a few inherent risks. But the risks involved can be calculated, managed, and even reduced if properly planned and developed.

Need another reason to explore exporting for your business? How about some free money?  The State Trade and Export Promotion Program (STEP) is a 3-year pilot trade and export initiative authorized by the Small Business Jobs Act of 2010 and administered by the Small Business Administration (SBA).  Funded by federal grants and matching funds from the states, the total amount available to the states under the program is $90 Million. The goal…to increase exports.  In 2011, the STEP program awarded 52 grants totaling $30 million with the average grant for $577,000.

Possible areas where the STEP grants can help your business include:

•  support for small business participation in foreign trade missions and foreign sales trips;

•  website translation fees;

•  design of international marketing media;

•  trade show exhibitions;

•  participation in training workshops; and

•  other export initiatives determined to be appropriate by the SBA.

The amount of available funds can vary drastically from state-to-state.  For instance, Texas has received only $161,711 so far, where Michigan has received $1,466,978 of the federal grant funds.  Pennsylvania has received the most federal funding to date with a total grant amount of $1,710,904.  Specifically, Michigan’s step program provides direct reimbursements to qualified small- and medium-sized export companies to develop or expand export related activities via cost reimbursement of 50 percent of allowable export-related activities.  Michigan companies are eligible for up to $25,000 in assistance.

To be eligible, companies must:

• Have fewer than 500

• Be in good standing with the Michigan Department of Treasury

• Provide an Employer Identification Number that is linked to a Michigan address

• Meet all requirements listed in the “Eligibility Guidelines for Michigan STEP Program.”

 To apply for the STEP Program, visit your state’s SBA website and complete the online intake form. The intake form is simple to fill out and will take less than 15 minutes. Upon receipt, you will be contacted to confirm eligibility status and next steps.  Depending on your state’s requirements, your business may be able to use the grant money to attend a domestically located “international tradeshow.”  So expenses like travel costs, booth costs, lodging and food could be covered for your next trade show under the STEP Program.

 

Resources:

SBA Website for forms, FAQ’s, and updates (http://www.sba.gov/about-offices-content/1/2889/resources/14315)

Office of Internal Trade for details on the exporting business (http://www.sba.gov/about-offices-content/1/2889)

Michigan Advantage website for details on the Michigan STEP Program. (http://www.michiganadvantage.org/STEP/)

STEP Webinar (http://www.youtube.com/watch?v=VYktROV-BsM)