overseas shipping containers to represent small businesses that export

U.S. government benefits for small businesses that export

3 min read
Meredith Wood

For a small business owner, choosing to begin exporting can be a big decision. There are tons of operational and logistics challenges, not to mention complicated financial and legal hurdles. However, the advantages are hard to ignore: exporting means increased access to different customers (and their varied demands), greater profit, faster growth, and avoiding seasonal fluctuations in the domestic market.

Starting to export is a difficult step, but often a rewarding one.

The U.S. government knows that exporting is good for the economy, too. But while 98 percent of exporters in the U.S. are small- or medium-sized businesses, that still only accounts for about 1 percent of domestic companies. In order to pump up the number of small businesses involved in exporting, the government runs programs, offers financing, and gives grants. The only trouble is finding out the details — and we’ve done that for you!

Keep reading to learn about eight different government benefits small business exporters can qualify for.

1. Export Express Loan Program (SBA)

Many of these initiatives are run through the Small Business Administration, and the Export Express Loan Program is no exception. With a loan approval process of less than two days and pretty lenient eligibility standards, this program offers financing up to $500,000 to small businesses interested in starting or expanding their export arms.

With so few restrictions — the business must be at least a year old (unless export knowledge and experience can be demonstrated), and the funds can be used in a number of ways — the Export Express Loan Program is an incredibly flexible and useful path for the export-interested owner to take.

An important note: The SBA doesn’t offer funds directly to borrowers, but rather guarantees other loans with government money. You’ll still have to secure a loan from your lender — but their risks will be greatly decreased, so they’re more likely to offer you good terms.

2. Export Working Capital Program (SBA)

Another benefit from the Small Business Administration is the Export Working Capital Program (EWCP), which similarly has a quick turnaround for processing and offers small business owners a great deal of flexibility. You’re a bit more limited in how you use the funds this program offers — advances for up to $5 million — but still, those uses are central to an exporting business: financing raw materials, inventory, labor, and all other overhead costs associated with fulfilling export sales orders.

3. International Trade Loan Program (SBA)

The final financing initiative from the SBA is the International Trade Loan Program. This program lets you secure up to $5 million for the construction, development, maintenance, expansion or repair of facilities and equipment that contribute to your exporting ability.

Whether you need to fix a fleet of vehicles or invest in new vacuum-sealing technology, the ITLP is your best bet for a great loan with a low interest rate.

4. Specialized Financing for Emerging Market Investment (OPIC)

The Overseas Private Investment Corporation (OPIC) is an arm of the U.S. government involved with development finance. Established in 1971, it independently supports exporting businesses with a variety of services — including specialized financing. The OPIC gives sizable " target="_blank" rel="noopener noreferrer">direct loans to small businesses in order to finance foreign investments in up to 150 developing countries with emerging markets, encouraging U.S. businesses to move outside traditional trade lines. If you’re interested in exploring the potential of the road less traveled, this financing option could be for you.

5. Political Risk Insurance (OPIC)

Back again with the Overseas Private Investment Corporation — but this time, with political risk insurance. The OPIC recognizes that its specialized financing opportunity comes with unique challenges, and accordingly provides insurance against events like civil war and terrorism, improper foreign government interference with trade, and the restrictions of local-currency dealings. Combining the two OPIC offerings could lead to a powerful but low-risk venture for the small business owner looking to export. Don’t be afraid to think outside of the box when growing your business!

6. The STEP Program (SBA)

We said that the International Trade Loan Program was the final financing benefit offered by the Small Business Administration, but including the STEP Program isn’t cheating, we promise. The State Trade and Export Promotion Pilot Initiative encourages individual states to fund their own financing and insurance programs, then matches their payments. It’s an indirect effort on the part of the federal government to get small businesses exporting, and it’s been doing well: its fourth round of funding came in FY 2015, in which it was awarded $17.4 million to spread across the 50 states, District of Columbia, Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, Commonwealth of Northern Mariana Islands and American Samoa.

During the fourth round of funding in FY 2015, the STEP program awarded 40 cooperative agreement awards, totaling $17.4 million.
During the fourth round of funding in FY 2015, the STEP program awarded 40 cooperative agreement awards, totaling $17.4 million.

Check out the program link and investigate what options your specific state, territory, or commonwealth has!

7. Project Proposals (USTDA)

Another mouthful, the United States Trade and Development Agency (USTDA) offers grants and contract opportunities for small businesses to research potential projects in developing and middle-income countries. While this option might not finance tangible investments like equipment or facilities, it does allow for increased exposure to and analysis of a foreign market, by funding travel and business contact development opportunities. As they say, knowledge is power — and this set of grants could prove an invaluable first step in assessing your small business’s export potential.

8. Advice and Information (Various)

To that end, the U.S. government offers a wide variety of knowledge sources for the pragmatic and motivated small business owner.

The SBA has U.S. Export Assistance Centers in many major metropolitan cities across the country that provide personal and professional advice from experienced individuals, and an excellent Export Business Planner that maps out the steps to making your small business export-ready.

BusinessUSA offers a fast, simple wizard that can show you what tax credits your business is eligible for — taking exporting into account — as well as a state map that charts additional resources.

Finally, Export.gov offers conferences, webinars and other training to business owners looking to expand into exports.

The savvy small business owner will take advantage of every resource he or she can, from financing plans and grants to informative tools and local advisors. Moving into exporting can be a risky venture, but if you’re well-prepared, its payoff can be hugely rewarding. Thankfully, the U.S. government recognizes the importance of small and medium business exporting, and has provided a bevy of benefits for you to use. Good luck!

The above content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.