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Exporting for small businesses now a STEP away with SBA

Carlos Medina, Pres SHCCNJ, Maria Contreras-Sweet, SBA Administrator, Luis O De la Hoz, SVP The Intersect Fund, and Tayde Aburto, Pres HCEC.

From left to right, Carlos Medina, Pres SHCCNJ, Maria Contreras-Sweet, SBA Administrator, Luis O De la Hoz, SVP The Intersect Fund, and Tayde Aburto, Pres HCEC.

Have you been thinking of expanding your business globally looking for new opportunities, maybe in Latin America where you dominate the language and have strong business and family connections?

For small business owners, it might be a scary proposition to get entangled with the import-export red tape but now The State Trade and Export Promotion Grant Program (STEP), a 3-year pilot trade and export initiative to make matching-fund grants for states to assist “eligible small business concerns,” enter and succeed in the international marketplace, might give you an opportunity.

About the Program

The STEP Program’s objectives are to increase the number of small businesses that are exporting, and to increase the value of exports for those small businesses that are currently exporting.

The program’s STEP services are managed and provided at the local level by state government organizations. The program is managed at the national level by the U.S. Small Business Administration’s Office of International Trade. At the state level, The Program has total Federal funding of $60,000,000, for use over a two-year period.

Under the statute, the 50 states, District of Columbia, Commonwealth of Puerto Rico, Virgin Islands, Guam, and American Samoa, are eligible to compete for award of matching-fund grants. The ratio of Federal to state matching funds is 75% to 25%, except for high exporting states, for which the ratio of Federal to state matching funds is 65% to 35%, and territorial possessions of the Virgin Islands, Guam, and American Samoa, for which matching funds requirements are waived to a maximum of $200,000.

Services to be provided by states to ‘eligible small business concerns,’ under the Program include support for participation in foreign trade missions and market sales trips, subscription to services provided by the Department of Commerce, design of international marketing products and campaigns, export trade show exhibits, training, and other efforts aligned with Program goals.

Under the Program, in most cases the Federal government provides 75% of the funding required for the total project, and states provide 25%. However, for the top three states in value of exports, the Federal government provides 65% of total funding, while states provide 35%.

For further information regarding the STEP Program, and state-by-state information, please go to http://www.sba.gov/content/state-trade-and-export-promotion-step-grants-pilot

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How to Find STEP State Service Providers

  • Award amounts, program descriptions, and points of contact for all states, listed alphabetically[link]
  • Scroll down to table entitled “Current Grants by State,” and click on individual states for award amounts, program descriptions, and points of contact.
  • Contact STEP@sba.gov (link sends e-mail)

Current Grants by State

State Federal Award State Match Award Total
Alabama $115,251.00 $38,417.00 $153,668.00
Arkansas $207,535.00 $69,178.00 $276,713.00
California $747,781.00 $402,605.00 $1,150,386.00
Colorado $195,938.00 $65,313.00 $261,251.00
Connecticut $350,000.00 $116,667.00 $466,667.00
Delaware $276,741.00 $92,247.00 $368,988.00
Hawaii $750,000.00 $250,000.00 $1,000,000.00
Idaho $346,708.00 $115,569.00 $462,277.00
Illinois $685,855.00 $228,618.00 $914,473.00
Iowa $190,000.00 $63,333.00 $253,333.00
Kansas $296,533.00 $98,844.00 $395,377.00
Kentucky $400,000.00 $133,333.00 $533,333.00
Maine $161,048.00 $53,683.00 $214,731.00
Maryland $518,413.00 $172,804.00 $691,217.00
Massachusetts $500,000.00 $166,667.00 $666,667.00
Michigan $750,000.00 $250,000.00 $1,000,000.00
Minnesota $564,132.00 $188,044.00 $752,176.00
Mississippi $540,100.00 $180,033.00 $720,133.00
Missouri $599,000.00 $199,666.00 $798,666.00
Montana $347,688.00 $115,896.00 $463,584.00
Nebraska $300,570.00 $100,190.00 $400,760.00
Nevada $300,000.00 $100,000.00 $400,000.00
New Hampshire $199,878.00 $66,626.00 $266,504.00
New Jersey $498,000.00 $166,000.00 $664,000.00
New Mexico $193,700.00 $64,567.00 $258,267.00
New York $663,893.00 $221,297.00 $885,190.00
North Carolina $746,800.00 $248,933.00 $995,733.00
North Dakota $287,694.00 $95,898.00 $383,592.00
Ohio $700,000.00 $233,333.00 $933,333.00
Oregon $450,000.00 $150,000.00 $600,000.00
Pennsylvania $698,613.00 $232,871.00 $931,484.00
Puerto Rico $288,650.00 $96,217.00 $384,867.00
Rhode Island $373,000.00 $124,333.00 $497,333.00
South Carolina $349,218.00 $116,406.00 $465,624.00
Utah $395,000.00 $131,667.00 $526,667.00
Vermont $174,461.00 $58,154.00 $232,615.00
Virginia $578,500.00 $192,833.00 $771,333.00
Washington $747,300.00 $402,346.00 $1,149,646.00
West Virginia $200,000.00 $66,667.00 $266,667.00
Wisconsin $712,000.00 $237,333.00 $949,333.00

Explore exporting with the SBA

Here are very reasonable steps the Small Business Administration Export.gov has put together to help you start the process. Small businesses looking to increase sales and profit, reduce dependence on the domestic market and stabilize seasonal fluctuations should consider exporting. Consider these facts:

  • Nearly 96 percent of consumers live outside the U.S.
  • Two-thirds of the world’s purchasing power is in foreign countries.

Step 1: Register on Export.gov and take the Free Export Readiness Self-Assessment

Create an account on Export.gov and complete this questionnaire to determine if your small business is ready to begin exporting and get advice on how to expand into new markets. 

Step 2: Training and Counseling

The federal government offers free in-person counseling services to help small businesses obtain export financing and locate business opportunities overseas.

Located in major metropolitan areas throughout the U.S., these centers provide small and medium-sized businesses with local, personalized export assistance by professionals from the U.S. Small Business Administration, the U.S. Department of Commerce, the U.S. Export-Import Bank and other public and private organizations.

The U.S. Commercial Service provides a network of export and industry specialists located in over 100 U.S. cities and 80 countries. These professionals provide free counseling and a variety of services to assist small and midsized U.S. business export efforts.

The U.S. Trade and Development Agency provides this database of companies and individuals providing fee-based consulting services to small businesses interested in importing and exporting.

Take our online training course on exporting to help determine if exporting, as a business strategy, makes sense for your small business and whether the basic ingredients for export readiness are in-place.

Step 3: Create an Export Business Plan

Creating an export business plan is important for defining your company’s present status, internal goals and commitment. You learn how to develop an export plan by assembling facts, identifying constraints and setting specific goals and objectives as milestones to success.

Step 4: Conduct Market Research

Use market research to learn your product’s potential in a given market, where the best prospects exist for success, and common business practices. The Market Research Library (link is external) is the U.S. government’s repository of the latest information prepared by commercial and economic experts in U.S. embassies worldwide. Trade Stats Express is a powerful tool for identifying target markets.

Step 5: Find Buyers

Federal, state and local governments are continually organizing highly focused export events directly putting U.S. sellers and potential foreign buyers in direct contact. Opportunities range from meeting foreign buyer delegations at select U.S. trade shows to signing up for a foreign trade mission or trade show overseas.

Step 6: Investigate Financing Your Small Business Exports, Foreign Investment or Projects

Become familiar with SBA’s export loan programs and other federal government financing, insurance and grant programs to help your company finance its transactions and assist in carrying your export operations. These resources help small businesses ensure foreign payment and manage or remove risk from the equation for both the business and its bank.

 

This information was reposted from the SBA site

Hipatia Lopez partipates at 2015 SBM Summit

Empanada Fork selected to the Small Business Leadership Summit in D.C.

Hipatia Lopez, inventor of Empanada Fork, participates at 2015 SBM Summit

Hipatia Lopez, inventor of Empanada Fork, participates at 2015 Small Business Majority Summit

Hipatia Lopez, founder and owner of HL Unico LLC and inventor of the ethnic kitchen tool Empanada Fork, was selected as one of 100+ small business leaders from across the country to meet with policymakers, issue experts and senior members of the Obama Administration. The focus of the summit involved identifying policies to help small businesses thrive at the Small Business Majority’s inaugural Small Business Leadership Summit.

“I traveled to Washington D.C. to talk with policymakers and senior members of the Obama Administration about the top barriers to success entrepreneurs and small business owners face, and identify practical solutions to our everyday problems. The experience was extraordinary,” Hipatia shared with LIBizus.

Panel discussions, keynote speeches, interactive workshops and presentations featured top policymakers at the National Press Club and the White House. Small business leaders heard from Maria Contreras-Sweet, Administrator of the Small Business Administration, Sen. Kirsten Gillibrand (D-NY), Sen. Amy Klobuchar (D-MN) and top economic advisors to the President.

Maria Contreras Sweet at the Small Business Majority Summitt 2015

Maria Contreras Sweet at the Small Business Majority Summitt 2015

“As an active member of the New Jersey small business community, I was honored to be selected to attend the three-day Small Business Leadership Summit, hosted by Small Business Majority,” Hipatia said. “Some of the issues we discussed were related to the gap between Internet-based companies and small “mortar and brick” business owners who feel they are getting the short end of the stick in tax issues,” she shared.

Other interactive areas of discussion focused on key issue such as problems accessing capital, tax and economic policies, crowdfunding, women’s entrepreneurship, minority entrepreneurship, the freelance/microenterprise economy, technology and workforce issues.

“We heard from the head of the Small Business Administration, Maria Contreras-Sweet and several members of Congress, and spoke with top economic advisors to the President to help them understand how important small businesses are to boosting the economy and creating jobs,” Hipatia said.

Policies identified during the three-day event will be incorporated into Small Business Majority’s policy platform—the Small Business Economic Agenda for 2015-16—and shared with decision makers to elevate issues of importance to small business owners.

Businesswoman of the Year Hipatia Lopez, H.L. Unico LLC

2014 Businesswoman of the Year Hipatia Lopez, H.L. Unico LLC, SHCC of NJ

Hipatia Lopez, the inventor of the “Empanada Fork,” an ethnic kitchen utensil that works as a pastry press, started her business around the kitchen table during the holiday season when her family was making 100 empanadas. “I remember complaining about how long this last step was taking.  I literally could not get this ‘idea’ out of my mind, envisioning how it would look,” she shared.

As many startups and small businesses, Empanada Fork encountered difficulties in obtaining access to capital, especially from traditional sources such as banks. “I obtained an equity line of credit with my house as collateral,” she said. However, now she needs additional funding to grow her business.

“During the three-day summit, progress was made, but more needs to be done. To instate policies we need to succeed—like greater access to capital and changes to the country’s tax code—we need more small business owners to speak out and get involved,” Hipatia said.

To voice your small business concerns, Hipatia encourages you to take Small Business Majority’s survey at: www.sbmleadershipsummit.com/survey,

If you’d like to share your business story with LIBizus, please fill out this form and tell us about your business and products. We will post a FREE feature! (Certain restrictions apply. Limited time offer).

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5 Cs bankers ask for small biz loans post-Recession

bankers ask for small business loansAfter the Great Recession of 2008, the lack of sources for borrowing money has put many small businesses on hold or simply cleaned them out. The quest to borrow money to sustain operations or build inventory has been a lost battle for startups and those less than two years in business. Here are some tips from Betty Reiff, Assistant Vice President Portfolio Credit Manager for the Sun National Bank Business Banking division to improve your chances to obtain access to traditional small business loans.

Banks still keep a tight fist on small business loans

In this tough economic environment, banks ensure that loans will be repaid by streamlining the application process and helping potential borrowers understand the loan requirements and their debt obligations. As an underwriter, Reiff believes the five Cs of loan evaluation have not changed but the order in which each one is evaluated has. She refers to capacity –or cash flow-, collateral, capital, conditions and character.

  1. Capacity or cash flow requirements are placed at 1.2 times the amount of the requested loan. If $100K is the amount requested, Reiff needs to see approximately a monthly cash flow of $6000 net income –after interest and depreciation– to approve the application.
  2. Collateral is another tough requirement that only has not eased but increased since the Great Recession. “We expect the borrower to pay down 25 to 30 percent towards the purchase of a real estate property while working capital tops 80 percent of accounts receivables under 90 days,” she said.
  3. Capital is the amount banks require small entrepreneurs to invest in their own business, and how much they would invest at the time of the request. The bank should not be the only source of funds.
  4. Conditions –the capacity of the business to deal with current economic climate as well as any Nature or man provoked disaster need a sustainable plan and a small business should be able to provide one in those circumstances.
  5. Character talks to the personality and disposition of the borrower used to be a very important factor in the lending process but with a changing economy, banks’ ability to extend traditional finance has lessened. Even if the small business owner has been a bank client for many years, character will not change a “no” to a “yes” in the underwriting process if the cash flow and the collateral are not strong factors, according to Reiff.

Did you have a bankruptcy due to a nasty divorce? Tax liens or judgments because of a family member’s long-term care? Partners that left you running on empty? All the information that will appear on your credit is viewed with better eyes if explained in anticipation.

“Not all negative information is bad news if the underwriter can see you handled the situation properly. It might even help the borrower in certain cases.”

Most importantly, do not hide any information. Reiff “googles” her clients and their businesses trying to confirm stories and situations. “With all the public information out there, it is hard not to find what you are looking for. Better to tell everything up front and see if the item can be overcome than have the underwriter discover something and wonder ‘What else don’t we know,’” she concluded.Business Handshake

 

General small business loans 7(a): amounts, fees & interest rates

The specific terms of SBA loans are negotiated between a borrower and an SBA-approved lender. Find out what provisions apply to all SBA 7(a) loans. (At the SBA corner)

 

(A version of this article appeared on May 2013 @VOXXI.com)