SMALL BUSINESS TRADE AND EXPORTING
It is crucial that small businesses get the promised benefits of our international trade relationships and are able to compete in the world economy.
While globalization has created opportunities for small businesses to sell their goods and services in new markets, not enough small businesses are taking advantage of these international opportunities. In fact, according to the U.S. Department of Commerce, only 266,457 of the approximately 27 million small businesses, or less than 1 percent, currently sell their products to foreign buyers. With small businesses being so essential to our economy, we must help them take advantage of all potential opportunities, including those in foreign markets.
Small businesses face particular challenges in exporting. It can be difficult for small exporting firms to secure the working capital needed to fulfill foreign purchase orders, for instance, because many lenders won’t lend against export orders or export receivables. Small business owners may not know how to connect with foreign buyers, or may not have the time or resources necessary to understand other countries’ rules and regulations. Small businesses need specialized assistance to sell their goods and services to the 95% of the world’s customers who live outside U.S. borders. For information on the SBA’s assistance for small business exporters, please visit http://www.sba.gov/aboutsba/sbaprograms/internationaltrade/index.html.
Currently, federal programs are grossly inadequate at helping small businesses overcome the challenges of exporting. That is why Ranking Member Snowe introduced S. 1208, the “Small Business Export Development Opportunity Act.” To read the bill, please click here.
This legislation gives small businesses the resources and assistance needed to explore potential export opportunities, or to expand their current export business. A summary of the legislation may be found here:
The bill includes a provision to establish a United States Trade Representative for Small Business, in order to ensure that small business interests are reflected in U.S. trade policy and trade agreement negotiations.
The legislation includes a provision to elevate the head of the Small Business Administration (SBA) office responsible for trade and export programs to the Associate Administrator-level, reporting directly to the Administrator. It also includes provisions requiring that the SBA immediately fill its trade specialist positions that have been vacant for years.
The Small Business Export Opportunity Act of 2009 would bolster the SBA’s technical assistance programs, and will improve export financing programs so that small businesses have access to capital needed to support export sales. Furthermore, the legislation increases the coordination among other federal agencies – the Department of Commerce, the Office of the U.S. Trade Representative, and the Export-Import Bank – to ensure that small businesses benefit from all of the export assistance the federal government offers.
Further, the legislation provides small businesses with matching grants, of up to $5,000, for expenses relating to activities that help them start or expand export activity. It creates a new Office of Small Business Development and Promotion at the SBA, and it improves the SBA’s network of international trade counselors. This legislation increases the maximum size of SBA-guaranteed export working capital and international trade loans, and it establishes a permanent Export Express program. It also creates a program to provide support for small businesses related to trade disputes and unfair international trade practices.
We cannot overlook the impact of trade on small businesses. An investment in small business exporting assistance is an investment in our economy. This legislation will help small businesses stay competitive, help them grow, and speed the recovery of our economy as a whole.