As small businesses strive to recover from the COVID-19 pandemic, many may look to international trade to expand revenue opportunities.
May is International Trade Month, the perfect opportunity for small business owners and entrepreneurs to regain their pre-pandemic momentum by tapping into global demand and international markets.
In a difficult and uncertain situation, trading can be essential in sustaining income with a new or expanded customer base.
As they strive to enter or re-enter the global marketplace, Michigan’s small businesses are sitting on the precipice of success. Almost 96% of global consumers live outside the United States, and commerce accounts for almost two-thirds of the $ 80 trillion global economy. Since exporting is a component of a company’s growth strategy, a business can grow faster, create jobs and pay higher wages, while contributing to the local economy.
We know that by looking at the data. Here in Wolverine State, a total of 15,015 companies exported merchandise from Michigan in 2018. Of these, 13,369, or 89%, were small businesses, which generated 21.5% of the 53 , $ 4 billion in Michigan’s total exports.
The international trade and assistance that the SBA can provide are the means to help Michigan small businesses enter or expand their presence in the global market. In addition, recent U.S. trade deals have created more favorable avenues to support the export of small businesses, especially in some important Michigan products, including small gasoline trucks, motor vehicle transmissions, large automobiles, motor vehicle body parts, vehicle mirrors. , various parts of motor vehicles, mid-size automobiles, rear-view mirrors of vehicles, airplanes, including engines, internal combustion parts of spark ignition engines, and more, which can be sold outside the borders of our country.
It’s a huge and tempting market – and you can call on the US Small Business Administration and its partners to help you grow globally with confidence.
Prospective and experienced exporters can now access the free SBA network, including SCORE mentors and 11 Michigan Small Business Development Center network locations, using modern technology. They offer consulting services to small business owners at all stages of the business and specific international trade consultants to work with anyone statewide. The agency’s Export Assistance Center serving Michigan can also provide personalized business advice for selling outside the country.
For international trade finance, the SBA supports three specific export loan options: international trade, export working capital and the Export Express. With loan amounts of up to $ 5 million, these can provide businesses that export directly or indirectly with alternatives to cash up front, reducing risk and improving cash flow.
Export Express loans up to $ 500,000 can be approved in just a few days. The SBA guarantee of up to 90% makes the risk more attractive to lenders. The Economic Aid for Small Businesses, Nonprofits, and Hard-Affected Sites Act, signed on December 27, 2020, allowed the SBA to pay principal, interest, and borrowers’ fees on these loans for up to at least three months from February 1. 1, reduced lender fees and gave lenders more flexibility in structuring loans. Several Michigan-based SBA lenders can provide these export loans to help you on your way.
The SBA also supports the development of export activities through the state’s trade expansion program. The agency has provided $ 9.6 million in STEP funds to Michigan Economic Development Corp. since 2011.
In fact, this year’s SBA award of $ 1.35 million is increasing the global footprint of Michigan small businesses through virtual events and some in-person events have exposed Michigan entrepreneurs to markets in Canada, Brazil, from Mexico, China, United Arab Emirates, Africa and Europe, Israel and South America.
There is no doubt that international trade can improve the competitiveness of small businesses. During International Trade Month, Michigan businesses should consider pivoting and improving their customer base and revenue.
Laketa Henderson is the Michigan District Director of the US Small Business Administration.