As small businesses work toward continued recovery from the COVID-19 pandemic, many can pivot to international trade to expand income opportunities. May is International Trade Month, which is 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 challenging and uncertain situation, trade can be key for sustaining revenue with a new or expanded customer base.
By working to enter, or re-enter, the global marketplace, New Jersey small businesses are sitting on the precipice of success. Nearly 96 percent of the world’s consumers live outside the United States and trade represents nearly two-thirds of the world’s $80 trillion economy. With exporting as a component of a business’ growth strategy, a company can expand faster, create jobs, and pay higher wages — all while contributing to the local economy.
We know this by looking at data. Here in the Garden State, a total of 20,633 firms exported goods from New Jersey in 2020 according to the U.S. International Trade Administration. Of these, 18,953, or 91.9%, were small firms, which generated 41.4% of New Jersey’s $31.8 billion in total exports.
International trade and assistance the SBA can provide are the vehicles to help New Jersey small businesses enter or expand their presence in the global marketplace. Further, U.S. trade agreements have recently created more favorable avenues to support small business exporting, especially in relation to some important products, including chemical powders like palladium and rhodium, beauty products, mid-sized automobile components, medical instruments and more, that can be sold outside our nation’s borders.
It’s an immense and tempting market — and you can tap the U.S. Small Business Administration and its partners for help to expand throughout the world with confidence. Would-be and experienced exporters can access the free SBA network now, including SCORE mentors and 13 New Jersey-based Small Business Development Centers through technology. They offer free advising services to small business owners in all business stages and specific international trade consultants to work with anyone. The SBA’s Export Assistance Center serving New jersey can also assist with one-on-one business advice for selling outside of the country.
For international trade financing, the SBA backs three specific export loan options: International Trade, Export Working Capital, and Export Express. With maximum loan amounts up to $5 million, these can give businesses who export directly or indirectly alternatives to cash in advance terms, reducing risk and improving cash flow. Export Express loans up to $500,000 can be approved within just a few days. The SBA guaranty of up to 90 percent makes the risk more attractive to lenders. The Economic Aid Act enables the SBA to pay the borrowers’ principal, interest, and fees on these loans for at least three months starting Feb. 1, reduced lender fees, and gave lenders more flexibility in structuring loan packages. Several New Jersey-based SBA lenders can make these export loans to help you on your way.
The SBA also supports export business development through the State Trade Expansion Program. The agency has awarded $1 million in STEP funds last year alone to the New Jersey Business Action Center, increasing the global footprint of small businesses through virtual and some in-person events in foreign markets spanning Canada, Brazil, Mexico, China, United Arab Emirates, Israel, Africa, Europe and South America.
Undoubtedly, international trade can enhance the ability of small businesses to compete. During International Trade Month, Garden State firms should consider pivoting and enhancing their customer base and revenues. For more information on SBA’s trade financing and assistance, visit sba.gov/exporting or contact SBA New Jersey’s International Trade Officer, Eduard Ekel at Eduard.Ekel@sba.gov.
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