Making the jump to international markets can be a tough one for small businesses, but a relatively new U.S. Small Business Administration program is offering some excellent opportunities.
The agency’s State Trade and Export Promotion (STEP) Program is a pilot program that provides matching federal funds to U.S. states and territories, with the goal of encouraging small businesses to enter global markets—and help them succeed in doing so.
First authorized in 2010 as part of the Small Business Jobs Act, the STEP Program provides funds to states and territories, which then provide financial assistance to local businesses with ambitions to provide products and services to international customers. Federal funding accounts for 75 percent of the award, while non-federal funding makes up the other 25 percent. (In states with heavier export activity, the ratio is 65 to 35.)
Since it first began awarding funds in 2011, the STEP Program has provided $84.4 million to 167 small businesses, which amounts to an average award of $505,389. Although the award amounts and number of businesses vary from year to year, the impact these funds can have in assisting businesses as they expand to international markets is indisputable.
Qualifying for the STEP Program requires that a business meets a variety of eligibility criteria:
- The business needs to have been in operation for at least a year.
- The business must be operating profitably.
- The business needs to be able to prove it understands the costs involved with conducting export business. (Costs include packing and shopping, freight forwarding and working with customs brokers.)
- The business must have a plan in place that relates to its proposed exporting.
Business owners interested in applying for funding through the STEP Program should understand that the process is highly competitive. However, there are certain types of project proposals that have been favorably considered during the funding process—among them the creation of international marketing materials, participation in export training programs and travel to other countries for trade shows. To learn more, business owners should contact the appropriate state or territorial agency that works with the STEP Program.
The possibilities provided by the STEP Program are numerous, but the fact remains that making the leap into the international marketplace and the export process brings a host of legal issues to the table. Business owners who would like to explore the opportunities that exist in engaging overseas customers should consult with an experienced and knowledgeable business attorney to ensure they get the guidance they need, along with access to the appropriate resources.
BoltNagi is well-established and widely respected small business law firm serving clients throughout the U.S. Virgin Islands.