Expanding Your Business to International Markets
The U.S. Small Business Administration can be a resource for small business owners who want to expand their market outside the U.S.
If you’re a small business looking to grow, consider this: More than 70 percent of the world’s purchasing power is located outside of the United States, according to the U.S. International Trade Administration. Each year, U.S. firms sell billions of dollars’ worth of goods to markets all over the world.
Exporting has many potential benefits, including helping to diversify your business and increase revenue. If you’re an entrepreneur interested in taking your business global, you have access to many helpful programs and resources.
Gary DeGrange, senior vice president of Global Trade Solutions for Zions Bancorporation, N.A., offers insight into how entrepreneurs can begin exporting with the help of one of these resources, the U.S. Small Business Administration (SBA).
“Opportunity is out there,” says DeGrange. “The key is taking advantage of valuable resources that can help you overcome the obstacles that face most businesses as they attempt to enter international markets.”
SBA Export Resource #1: Export Assistance & Education
DeGrange explains that as businesses consider exporting, they should expect to face some barriers to entry. From making and receiving payments to developing their export strategy, business owners will likely need assistance to be successful.
“The SBA works with local agencies across the U.S. to provide support to business owners seeking counseling and education about import-export trade and international markets,” DeGrange says.
- U.S. Export Assistance Centers (USEACs): According to SBA, each USEAC is staffed by professionals from the SBA, the U.S. Department of Commerce, the U.S. Export-Import Bank, and other public and private organizations. Together, their mission is to provide the help businesses need to compete in today’s global marketplace.
- Small Business Development Centers (SBDCs): According to SBDC, Small business owners and aspiring entrepreneurs can go to their local centers for free face-to-face business consulting and low-cost training. Topics include business planning, accessing capital, marketing, regulatory compliance, technology development, international trade and much more. There are nearly 1,000 local SBDC centers across the United States.
- SBA Office of International Trade: According to SBA, the Office of International Trade can help any small business that faces barriers in accessing international markets. You can also call the International Trade Hotline at 855-722-4877.
SBA Export Resource #2: Grant Program
Since 2011, more than $138 million of State Trade Expansion Program (STEP) grants have been awarded to U.S. small businesses to support projects that help them sell their goods and services to foreign buyers. According to SBA, STEP helps small businesses learn how to export, participate in foreign trade missions and trade shows, obtain services to support foreign market entry, design international marketing products or campaigns, and more.
SBA Export Resource #3: Export Finance Programs
The SBA guarantees loans through three loan programs to support small businesses exploring international trade. “With SBA loans, small business owners work with a participating lender, such as Zions Bank, to access much-needed capital,” DeGrange explains. “An SBA guarantee helps lenders mitigate some of the risks of international lending, which allows more businesses to qualify for funding.”
- SBA Export Express Loan: Export Express lenders, like Zions Bank, can directly underwrite a loan without getting prior approval from the SBA, which allows you to get capital quickly. Loans can be up to $500,000.
- SBA Export Working Capital Loan: Export Working Capital loans allow small business owners to apply for loans in advance of finalizing an export sale or contract, giving exporters greater flexibility in negotiating export payment terms. These loans can be up to $5 million.
- SBA International Trade Loan: International Trade loans help small businesses enter international markets and make investments to compete with other importers. These loans offer a combination of fixed asset, working capital financing, and debt refinancing with the SBA’s maximum guaranty of 90 percent on the total loan amount. The maximum loan is $5 million in total financing.
The Zions Bank Global Banking team helps clients address the challenges and mitigate the risks of transacting business around the world. We have a robust global correspondent banking network and an experienced staff of global trade bankers and foreign exchange officers to work with you.
Loans subject to credit approval, SBA approval, terms and conditions apply. See a banker for details.
Ali Hardy is a freelance writer for Zions Bank.