Oversight of SBA’s State Trade Expansion Program
Summary
This is a hearing before the Committee on Small Business and Entrepreneurship of the United States Senate, titled Oversight of SBA's State Trade Expansion Program, on September 21, 2022, with Hon. Ben Cardin, Chairman of the Committee, presiding. The contents list Gabriel Esparza, Associate Administrator, Office of International Trade, Small Business Administration, as the Panel 1 witness, and Shaun Akhavan, Director of Exports, and Grace Preston, International Sales Manager, on Panel 2. In the opening statement, Cardin says the subject is oversight of the SBA's State Trade Expansion Program, the STEP program. The hearing closes with the record kept open for two weeks for statements and questions for the record.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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- Congressional materials
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- Chrg 117Shrg50574
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“Oversight of SBA’s State Trade Expansion Program.”
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S. HRG. 117–732
OVERSIGHT OF SBA’S STATE TRADE
EXPANSION PROGRAM
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
OF THE
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
SEPTEMBER 21, 2022
Printed for the use of the Committee on Small Business and Entrepreneurship
(
Available via the World Wide Web: http://www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
50–574 WASHINGTON : 2023
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED SEVENTEENTH CONGRESS
BENJAMIN L. CARDIN, Maryland, Chairman
RAND PAUL, Kentucky, Ranking Member
MARIA CANTWELL, Washington MARCO RUBIO, Florida
JEANNE SHAHEEN, New Hampshire JAMES E. RISCH, Idaho
EDWARD J. MARKEY, Massachusetts TIM SCOTT, South Carolina
CORY A. BOOKER, New Jersey JONI ERNST, Iowa
CHRISTOPHER A. COONS, Delaware JAMES M. INHOFE, Oklahoma
MAZIE HIRONO, Hawaii TODD YOUNG, Indiana
TAMMY DUCKWORTH, Illinois JOHN KENNEDY, Louisiana
JACKY ROSEN, Nevada JOSH HAWLEY, Missouri
JOHN HICKENLOOPER, Colorado ROGER MARSHALL, Kansas
SEAN MOORE, Democratic Staff Director
WILLIAM HENDERSON, Republican Staff Director
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(II)
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CONTENTS
WITNESS PREPARED STATEMENTS
Panel 1
Page
Mr. Gabriel Esparza, Associate Administrator, Office of International Trade,
U.S. Small Business Administration, Washington, D.C. .................................. 3
Panel 2
Mr. Shaun Akhavan, Director of Exports, Allied International, LLC, Glen
Burnie, MD ........................................................................................................... 18
Ms. Grace Preston, International Sales Manager, Geophysical Survey Systems
Inc., Nashua, NH ................................................................................................. 22
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(III)
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OVERSIGHT OF SBA’S STATE TRADE
EXPANSION PROGRAM
WEDNESDAY, SEPTEMBER 21, 2022
UNITED STATES SENATE,
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m., in Room
428A, Russell Senate Office Building, Hon. Ben Cardin, Chairman
of the Committee, presiding.
Present: Senators Cardin, Shaheen, Hirono, Rosen, Hickenlooper,
Ernst, Young, Hawley, and Marshall.
OPENING STATEMENT OF CHAIRMAN CARDIN
Chairman CARDIN. The Small Business and Entrepreneurship
Committee will come to order. Our subject for today’s hearing is
the oversight of the SBA’s State Trade Expansion Program, the
STEP program.
Let me just point out that there are two votes currently going on
on the floor of the United States Senate, so I expect members will
be coming in and out. We are going to get started, so I just wel-
come everyone to today’s hearing.
Today’s Senate Small Business Committee will conduct oversight
on the Small Business Administration’s State Trade Expansion
Program, also known as STEP. Though not as well-known as other
products and services operated by the SBA, STEP is a vital part
of the Federal Government’s toolkit for supporting small busi-
nesses.
As we continue to recover from the COVID–19 pandemic, inter-
national trade has the potential to be a major catalyst for growth
for American small businesses, but they are going to need some
help. Currently less than 1 percent of America’s small businesses
export their products and services. This is a missed opportunity.
Ninety-five percent of the global consumers live outside the United
States. This is a major market that American small businesses
have not yet engaged with their fullest capacity.
Small businesses typically work with razor-thin profit margins
and fewer staff. They cannot always afford trips abroad to connect
with potential trading partners or pay for the professional con-
sulting on how to navigate the rules that govern international
trade. Some companies may not even know how to translate their
website into another language.
These barriers are why Congress created STEP in 2010. I want
to thank Senator Shaheen for her foresight and leadership on this
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issue at that time. She led the effort to make STEP permanent
(1)
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2
when it was a pilot program, as well as the reauthorization effort
in 2016. She continues to be a fierce advocate on behalf of small
businesses in the international export market.
STEP provides grants to state economic development agencies
which then help small businesses attend international trade shows
and connect with customers in foreign markets. The grants also
fund consulting and training to help small businesses navigate the
complex rules of international trade, many of which are new con-
cepts to small business owners, like tariffs.
More than a decade after its creation, the data confirms that
STEP is one of the best investments Congress can make in the
American economy. A 2020 performance report of STEP found that
for every dollar Congress invested in the program, it returns $42
in international sales to small businesses. That is quite a return.
Now is the time for Congress to double down on the success of
STEP by reauthorizing the program and providing funds to meet
the demand for all small businesses. Last year, states requested a
total of $39 million in funding through STEP program, but Con-
gress only funded the program at $20 million. As a result, my home
state of Maryland, which requested $900,000, only received
$600,000 in grants.
Put another way, we currently see a 42-to-1 return on invest-
ments in STEP. This past year, STEP only had funding to grant
half of the total amount that was requested by state governments.
Our inability, our failure to fund the second half of these requests
cost small businesses an estimated $1 billion in sales in the export
market. Again, this is a missed opportunity.
Helping our small businesses succeed in the international mar-
ket is vital to our nation’s success on the world stage. Other coun-
tries invest heavily in expanding their small businesses to new
international markets. By failing to invest in the export capacity of
American small businesses, we are losing ground to foreign com-
petitors.
So I am looking forward to an informative discussion with our
witnesses today about why this program is worth investing in and
what we can do to make it even better. I am especially interested
in hearing from Shaun Akhavan, who is the Director of Exports at
Allied International, a family-owned food distribution company
based in Glen Burnie. In 2016, Allied International used a STEP
grant to attend trade shows in France, Germany, and Dubai. Prior
to receiving the grants, exports were a limited portion of the com-
pany’s revenues, but today it is a major growth area for the com-
pany that has allowed them to increase the size of their workforce.
I am also looking forward to hearing from Grace Preston, who
was named Exporter of the Year for New England by the SBA in
2019. Grace leads international sales for Geophysical Survey Sys-
tems in Nashua, New Hampshire. The company has taken advan-
tage of STEP, which has produced great results.
Congress has an opportunity to help other small businesses mir-
ror the growth and job creation of Allied International through ex-
ports. We cannot let this opportunity pass us by.
I want to thank each of our witnesses for joining us today so we
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can learn more about the program, and I look forward to hearing
your testimonies.
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I just really want to point out that in cooperation with the Rank-
ing Member, he has indicated that we can proceed and we will do
that. There are conflicts in schedules but he asked me to continue
the hearing.
And we will now go directly to our first witness. We have two
panels today. We are going to hear first from Mr. Gabriel Esparza,
who is the Associate Administrator of the Office of International
Trade, U.S. Small Business Administration. I must tell you I just
had a chance to have lunch with Administrator Guzman. She says
very nice things about you, so let us see if you can live up to her
expectations. I would be glad to hear from you.
STATEMENT OF GABRIEL ESPARZA, ASSOCIATE ADMINIS-
TRATOR, OFFICE OF INTERNATIONAL TRADE, U.S. SMALL
BUSINESS ADMINISTRATION, WASHINGTON, D.C.
Mr. ESPARZA. Thank you, Chairman Cardin, Ranking Member
Paul, and distinguished members of the Committee. Thank you for
honoring me with the invitation to come before you today to discuss
the work of the Office of International Trade at the U.S. Small
Business Administration.
For America’s small businesses, exporting is an engine for
growth that allows our firms to reach new customers in an increas-
ingly interconnected global marketplace. Data shows that small
businesses that export are more resilient, expand faster, and create
higher-paying jobs for Americans. Raising awareness of the avail-
ability of trade assistance through the SBA requires shifting our
frame of reference for what an export looks like today. The advent
of digital tools, e-commerce engines, and maturing payment net-
works has reduced barriers to entry for small businesses to export
both products and services.
At the SBA, Administrator Guzman has prioritized leveraging
these digital technologies to create a whole new generation of ex-
porters. During the pandemic, e-commerce increased in the United
States and small businesses adopted digital strategies to survive
and grow their revenues, often finding customers all over the
world. We are driving transformational change so that the SBA can
help these accidental exporters become intentional exporters by ex-
panding and growing their businesses to new markets.
I am proud to bring my lived experience working around the
globe to SBA’s mission to help small businesses grow internation-
ally. Prior to joining the Administration, I helped lead a startup
small business that built a modern 911 emergency technology plat-
form. Our company launched in the U.S. and expanded around the
world. Prior to that I spent 13 years at American Express, working
with small businesses, and eventually leading global business de-
velopment for their Commercial Payments Division.
Over the course of my 26-year career I have lived, studied, and
worked around the globe, now almost 70 countries in total, while
at the same time being deeply intertwined in the small business
arena. In that connection, I have seen the power of American en-
trepreneurship on a global scale, and I work each day at SBA to
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ensure that our small businesses can find new customers to grow
and compete internationally.
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One of our office’s primary responsibilities is providing education
and training to small businesses that are interested in exporting.
We help businesses prepare for navigating the complexities of
international sales including customs, trade credit insurance, and
foreign exchange. Our efforts are supported by a range of partners
throughout the SBA, across the Federal Government, and with cer-
tain public-private enterprises.
After a business has established a solid idea, product, or service,
often including a track record of successful domestic sales, they
need access to capital to fund and grow their overseas expansion.
SBA’s lending portfolio provides guarantees on loans and credit
lines originated through the private banking industry. The Office
of International Trade is authorized to provide higher guarantees
on these facilities due to the unique circumstances faced by export-
ers, namely increased buyer work, country risk, and currency risk.
The SBA’s Office of International Trade also focuses on providing
grants to small businesses in the form of export expense reimburse-
ment through the State Trade Expansion Program, or STEP. This
year we are proud to be celebrating the 10th anniversary of STEP,
which, over the last decade, has awarded over $200 million to all
50 states and 6 territories. The STEP program has supported
12,000 small businesses and generated approximately $5.5 billion
in export sales.
Demand for STEP resources from the states is strong. This year,
STEP applications were the highest ever, both in terms of states
and territories applying as well as the total dollars requested. In
2022, we will have a record 48 states and 4 territories participating
in the program. Our partnership with the state as well as with ex-
ternal advocacy groups like the State International Development
Organization, or SIDO, is critical to the efficiency, relevancy, and
impact of the program.
The last piece of the puzzle for most small businesses as they
seek international opportunities is access to foreign markets. SBA
is deeply involved in the interagency trade apparatus of the Fed-
eral Government. It is there that we advocate for small businesses
for all matters related to trade policy and trade agreements, bring-
ing to life the real life experiences of small business owners that
we meet every day.
SBA is committed to ensuring that the core offerings of our Inter-
national Trade Office, education, capital, and market access are
available to the growing universe of small business exporters.
Across the agency, Administrator Guzman has tasked us with de-
veloping more customer-centric approaches to our work that meets
our small business customers where they are. That is why the SBA
is focused on increasing awareness for trade by connecting to a
broader audience of small businesses who are currently exporting
or could potentially be exporting.
I am humbled by the opportunity to serve at the SBA, and I am
excited about the future of our nation’s small businesses to export
American-made products to customers throughout the world. I ap-
preciate the invitation to appear before you today, and I look for-
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ward to your questions.
[The prepared statement of Mr. Esparza follows:]
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Chairman CARDIN. Mr. Esparza, first of all thank you very much
for your service. You bring 25 years of experience to this task, and
you have seen it from both sides, working on behalf of the City of
Los Angeles as well as the private sector with American Express.
So I think you bring unique perspectives here.
We know that export business is challenging for any small busi-
ness that does not have the staff capacity to understand the intri-
cacies of international trade to make the connections, to deal with
the foreign regulations, to deal with export rules here in the United
States. But it is particularly challenging in traditionally under-
served communities.
Do you have any recommendations as to how the STEP program
can be better tailored to deal with small businesses located in tra-
ditionally underserved communities?
Mr. ESPARZA. Thank you, Mr. Chairman. It is actually an explicit
part of the Notice of Funds Opportunity every year that we gather
applications from the states that one of the criteria is, in past per-
formance, how much has been done to provide STEP grants and re-
imbursements to exactly the small businesses that you are talking
about, those from underserved communities generally, rural com-
munities, veteran small businesses, women small businesses.
So it is an explicit part of the application that a track record of
past performance on providing reimbursements to these under-
served communities helps in a successful application. That is num-
ber one.
Number two is our ability to market the program, to get the
word out, and in partnership with the states it is fundamental to
being able to connect with all potential applicants. And so Adminis-
trator Guzman has tasked all of us across the agency not only to
be as customer-centric as possible in all the work that we do but
to have an equity lens that dictates we are going to find small busi-
nesses, and those specifically from underserved communities, to
target them for programs like STEP.
Chairman CARDIN. I thank you for that. That is certainly ex-
tremely encouraging. I would urge you to make available to us and
to make available in your public disclosures the progress you are
making. We know the baseline is going to be pretty low in this
area, so we do not expect miracles overnight. But it would be good
to see the demographics of the businesses that you serve so that
we have a better understanding of how well we are meeting our
goal of serving all small businesses in an opportunity for inter-
national trade.
So we would appreciate if you would get that information to us
in a granular way so we can help you in achieving the objectives
that you are trying to achieve.
Mr. ESPARZA. Of course.
Chairman CARDIN. We have also heard that there are adminis-
trative challenges in dealing with the STEP grant. Can you just
share with us whether you have dealt with that concern by grant-
ees and what efforts you are making to try to make sure the proc-
ess is as easy to administer as possible for those that are partici-
pating in the program?
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Mr. ESPARZA. Thank you, Mr. Chairman. I have heard that feed-
back, and I find it particularly important in my conversations with
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10
states and the state directors managing the STEP program that in-
deed there are occasions in which they have found challenges with
both the application process as well as the reporting requirements.
I acknowledge that feedback, I am listening to it, and, in fact, I
have tasked my team and our office to look into those matters. And
what we ask for is some version of what are we asking the states
for in terms of data, how are we asking for it, what platforms, how
frequently are we asking for it, and then when we do get it, what
do we do with it?
And so I have asked the team to look into these matters, and
where we can find opportunities to improve our processes we will
absolutely do so. I find that any business transformation process
that we can endeavor to improve the efficiency and efficacy of the
program we will continue to make every effort to do so.
Chairman CARDIN. I have met with many small business owners
that tell me it takes multiple years before you can develop the type
of connections in the international arena to be able to establish a
viable export business. Obviously, to be able to make that net-
working connection at a trade mission is a critical first step. But
it does not always end with the success. It takes more work than
just one visit to a trade mission.
Can you just elaborate a little bit on that as to the time needed
for small businesses to be able to mature in export markets?
Mr. ESPARZA. Thank you, Mr. Chairman. Yeah, not only have I
heard that directly from small businesses that are using the STEP
program, for example, but in my own experience working in small
business. I know that international sales, by definition, take a long
time. And so part of the mandate of the Office of International
Trade is to make sure that all components of that journey are
something that we can touch and assist small businesses on.
It starts with education, training, consultation on just how to
navigate international sales. Secondarily, we provide access to cap-
ital to make sure that the financing journey of finding inter-
national sales, working capital in particular, access to working cap-
ital, is critical. And then third, that access to foreign markets is an
important component, so that we are driving small businesses to
markets where they are most able to find good opportunities.
And it is along that journey that we consult and work with small
businesses across the country, in order to help accelerate as many
of these international sales cycles as possible.
Chairman CARDIN. Thank you. Senator Marshall.
Senator MARSHALL. Thank you, Chairman. Administrator, wel-
come. My staff gets tired of me saying this, but if you cannot meas-
ure it, you cannot manage it. How do you measure success? What
type of metrics are you looking at?
Mr. ESPARZA. For the STEP program in particular, Senator?
Senator MARSHALL. I think if you want to expand it to your en-
tire, everything you oversee, that is fine. I am open-minded here.
Mr. ESPARZA. For the STEP program and for the bulk of what
we do in the Office of International Trade, Senator, we start with,
first and foremost, how much and how many export sales are we
driving out of our programs. Secondarily is how many jobs are we
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sustaining or creating. And then collectively across the work that
we do is what is the return on investment. The Chairman men-
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tioned the 43-to-1 return on investment for our STEP program. We
find that to be a perfect example in support of how viable and im-
portant these programs are.
Those are the primary measures. We have some secondary meas-
ures in terms of——
Senator MARSHALL. What are you using for like a baseline then,
like the last 5, 10 years, and what do your numbers look like at
this point for 2022?
Mr. ESPARZA. So we are always looking year over year, but we
are starting to see, of course, the trend analysis. At least for the
STEP program we have 10 years of data now.
Of course, Senator, you will appreciate that the last few years,
during the pandemic, it has been challenging. The trade shows and
trade missions that the Chairman mentioned were something that
we were simply not able to do.
Senator MARSHALL. Right. So where are we today compared to
pre-COVID, without those other years, as far as the baseline?
Mr. ESPARZA. Yeah. We are still coming out, Senator, of some of
the implications of the pandemic, so we are still in that trough and
starting to turn the cycle in terms of being able to——
Senator MARSHALL. Are any industries hurting more, any sec-
tors, than the other ones as you see us coming out of it?
Mr. ESPARZA. That is a good question. I do not know if I can put
my finger on one particular industry per se. What I will tell you,
though, is that what we did find, and I mentioned it in my opening
remarks, is that there were so many small businesses, in fact 80
percent of the nation’s small businesses are sole proprietors, single
individuals.
And as a result of their work in just being resilient and finding
opportunities to have a side hustle or whatever it might be for
them to continue to compete during the pandemic is they would
create a website, they would have an e-commerce engine, and they
would start to get international orders. Lo and behold, they did not
expect that. The Administrator has deemed these accidental ex-
ports. Our work is to try to be able to make some of those acci-
dental exporters intentional exporters. So wherever they are in
their journey, we are providing these tools to help them on that
journey.
Senator MARSHALL. Great. I want to talk about access to capital
for a second. Certainly as I go out and talk to businesses their big-
gest concerns and challenges right now are input costs—inflation,
supply disruption—and then just not getting people to come back
to work. You know, there is this low labor participation rate still
going on out there. Two or three million Americans are still not
back to work where we thought they would be if we would go back
to pre-COVID labor participation rate.
But access to capital certainly is a big, big challenge, especially
for small businesses, and I would think even so if you are trying
to get into this international trade. What advice would you give a
young, upstart business that wants to get into international trade?
What type of opportunities are there for access to capital?
Mr. ESPARZA. Well, we have, at the Office of International Trade,
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Senator, over 100 lending partners. These are primarily regional
banks and community banks. We have a few larger banks in the
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mix, but these are very local banks. And these are part of our part-
nership with the private banking industry. This is not us. This is
through the private banking industry, where they are ready, will-
ing, and able to lend, often with just conventional loans. It does not
have to be with an SBA guarantee.
But where a particular small business is risky, or in the specific
case of exporting small businesses, because of the unique dynamics
with international trade, if that risk merits an SBA guarantee then
the private banking industry will work with us to make sure that
those apply.
Senator MARSHALL. Thank you. You used the term ‘‘banks are
ready, willing, and able,’’ but Mr. Chairman, I would be curious
how your state is doing, but my community banks do not seem very
willing, ready, or able to do this. Most banks throw up their hands
and say, ‘‘We do not want to do these SBA loans.’’ Are you having
any challenges in your home?
Chairman CARDIN. I think we have a good demographic banking
community for SBA loans. International trade is a different story.
It is not as easy in international trade. Yeah, that is much more
challenging for community banks and regional banks, and I am
somewhat disappointed that you do not have more larger banks
that are interested because they engage more internationally than
some of our regional banks.
But I think your point is well taken. I will give you more time.
Senator MARSHALL. Thank you. I am happy. I appreciate the
time. I yield back.
Chairman CARDIN. Senator Hirono.
Senator HIRONO. Thank you, Mr. Chairman. I have been a sup-
porter of STEP as a way to help small businesses market their
products overseas, and of course during the pandemic a lot of the
STEP money in Hawaii went for things like trade shows, overseas
trade shows, and obviously during the pandemic that did not hap-
pen, so the small businesses had to become a lot more creative and
improve their ability to improve their websites, et cetera.
How can programs like STEP help businesses build their cus-
tomer base through online platforms? What does SBA do to help
the small businesses?
Mr. ESPARZA. Indeed, Senator. One of the reimbursable cat-
egories that we have is website development as well as translating
elements of the website into other languages so that they are as
relevant as possible to overseas customers.
At the same time, the Administrator has developed a Small Busi-
ness Digital Alliance at the SBA. We are working in partnership
with a number of big tech companies, including payment processors
and others that are engaged quite vigorously in overseas commerce.
So it is the totality of these tools, the grant programs that we
have, the loans that we have, these types of partnerships, that pro-
vide resources and opportunities for small businesses to compete,
and especially as the SBA transforms and the economy transforms
into a much more e-commerce and digitally driven economy.
Senator HIRONO. So Hawaii has received about $5 million to date
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for STEP. I think it is to date. I am not sure. I am just curious
to know what kinds of—generally these are products, not services.
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I do not know. Maybe it could be services and products that can
be exported overseas. Are they mainly products that are exported?
Mr. ESPARZA. Thank you, Senator. About two-thirds of the export
economy is goods. One-third is services. Services is growing, and
digital services are a growing component of that as well.
Senator HIRONO. So in terms of products, I think for Hawaii com-
panies, overseas, they generally have been selling to Japan or
Korea, South Korea. So do you have any kind of—I am curious to
know—countries where the market expansion can occur for busi-
nesses to really focus on certain markets, in certain countries? Is
that something that you all provide?
Mr. ESPARZA. Sure, Senator. Wherever a small business believes
their products or services are most relevant, we will support them
in understanding through market research and buyer match and
all those things that can support a given small business.
Of course, there are 20 free trade agreements in effect in the
United States, and so where those particular relationships and
partnership have the least friction and the most robust ability for
small businesses to trade we often will direct small businesses to
those particular markets. But wherever there is a market that a
small business is interested in trading, we will support them in
that effort.
Senator HIRONO. Do you have any kind of longitudinal informa-
tion on the small businesses that have been helped by STEP and
how long they last? Because, I mean, is that not one of the indica-
tors of success is how long the business lasts? You said that a lot
of them are individuals entrepreneurs. I have very little sense of
how long they are able to maintain their businesses in this envi-
ronment. Do you have any kind of data along those lines?
Mr. ESPARZA. Senator, as a headline, at least, we know that
small business exporters are more resilient, are larger employer
firms. Again, the Chairman said the important stat here which is
that 95 percent of the world’s consumers live outside of the United
States. So exporting companies, by definition, have greater markets
to go after, and over the long term are more successful.
Now specifically with respect to longitudinal studies, I am not fa-
miliar with any one that we have done in particular, but I am
happy to continue that conversation with you and your office about
the areas in which you would like to see some of that research.
Senator HIRONO. Well, when we think that in Hawaii this pro-
gram is mainly administered through the State Department of
Business, Economic Development, one would hope that they have
some data along these lines. To me, the long-term existence of
these entities is a desirable goal.
Thank you, Mr. Chairman. I yield back.
Chairman CARDIN. Thank you, Senator Hirono.
I want to sort of qualify my response to Senator Marshall’s in-
quiry about Maryland, but broaden it to the national issues as it
relates to access to capital through the SBA.
Our experiences in the CARES Act in establishing the Paycheck
Protection Program, we recognized there was going to be a chal-
lenge with commercial banks, particularly in a pandemic, that
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there would be a challenge as to whether they would be interested
in these loans, and that we were concerned that there would pri-
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14
ority-setting on larger loans, larger small businesses, and those
with priority-existing relations.
That proved to be correct, despite the fact that we put in the
CARES Act language specifically directing the SBA to make an ef-
fort to make sure that the potentially underbanked community re-
ceived priority treatment.
So we ended up allocating money to CDFIs to try to deal with
those that had more interest in working with smaller small busi-
nesses and with those in underbanked and underserved commu-
nities, and that worked, to a certain degree. Our later numbers
were much more successful, and quite frankly, I think Adminis-
trator Guzman is very sensitive on this issue and she has really
reached out to get to underserved communities.
So I mention that because in the area of international trade it
is even more challenging because you do not have the same num-
ber of banking institutions that are even interested in dealing with
international issues that may involve them being complicated in
their regulatory environment or in their collection environment.
So talk a little bit about how we can strengthen the tools within
the SBA to be sensitive to the smaller small businesses, those in
underserved communities, particularly as it relates to those that
want to have a presence in international export.
Mr. ESPARZA. Well, if I may, Chairman, you started on the bank-
ing component, and that is sort of, of the two sides of the coin one
is what we do for small businesses, one is what we do for the lend-
ers.
Part of our opportunity is to make sure that our products and
services are as relevant as possible to the banking industry as it
is to the small businesses who borrow from those banks. And as
you can probably imagine, a bank looks at a typical small business
and says, ‘‘Is this small business credit-worthy or not? Should we
lend to them or not?’’
And when it comes to exporting, it is seldom that a small busi-
ness is 100 percent an exporter. There is always some combination
of domestic sales and international sales that they have. Neverthe-
less, our products are restricted to only international sales or ex-
ports. Therefore, a bank looks and says, ‘‘Well, unless there is a
specific purchase order, unless there is a specific amount of inven-
tory that is being purchased, we have to give them a conventional
loan or a regular SBA 7(a) loan.’’
As such, one of the things that we, of course, would want to con-
tinue to work with you and this Committee on is evolving our prod-
uct set and the authority we have to work with lenders such that
in this case, instead of 100 percent nexus to international sales,
could it be some version of a majority, 51 percent or more, that al-
lows us to have greater appeal to the lending market just as much
as an applicability to the small business market?
Chairman CARDIN. Does that require a statutory change?
Mr. ESPARZA. I believe so, yes.
Chairman CARDIN. Well, we welcome your suggestions. As we are
looking at the reauthorization of the STEP program, these are
areas—we want to get broader into the international trade arena.
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So I think we would be interested in your recommendations in this
area.
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15
We would hope that the traditional tools, the 7(a) loans, would
be available to help those businesses that have a hybrid type of
business, but I can appreciate the fact that when you had the spe-
cial tools available to international commerce, we want to make
sure they are available, particularly for a young company that is
starting out, that may only have a very small percentage of inter-
national commerce but wants to grow to a bigger percentage.
Mr. ESPARZA. And indeed, Chairman, my team, over 20 export fi-
nance managers who are spread around the United States, do actu-
ally have expertise on the regular or non-international specific loan
products in the 7(a) portfolio. And I am thinking, in particular, of
the working capital products, the CAPline product, such that we
actually track and measure them on being able to offer and under-
write both products.
Because we know, again, wherever there is a product that is use-
ful to a small business, we want to make sure we are accom-
plishing their needs or fulfilling their needs wherever appropriate.
So whether it is a specific loan product that is from our office, or
our sister offices in the SBA, we are happy to satisfy those inter-
ests however possible.
What I am simply suggesting is that we could continue to evolve
the Office of International Trade products in order to make them
that much more appropriate and relevant to both small businesses
as well as the lending community as well.
Chairman CARDIN. And what is your relationship with the re-
sources partners such as the Women’s Business Center or the Vet-
erans Outreach Centers, in order to try to get a more diversified
group of small businesses engaged in international trade?
Mr. ESPARZA. So Administrator Guzman has tasked us with ful-
filling a one-SBA mindset. So we work very specifically and closely
not only across the SBA with resources that you talked about, the
Women’s Business Centers, Veterans Business Centers, the district
offices around the United States, generally, but we are in a unique
position in the Office of International Trade to be able to work
across government, for purposes of supporting exports from small
businesses. That includes the U.S. Commercial Service from the
Commerce Department. That includes the U.S. Trade Representa-
tive’s Office. That includes the State Department, the Agriculture
Department, so many other agencies of the Federal Government
that all touch trade in some form or fashion.
So we are plugged into those discussions, have a seat at the
table, and I find it personally fulfilling and a deep responsibility to
advocate for small businesses in all of those interactions and dis-
cussions across the Federal Government.
Chairman CARDIN. Thank you. Senator Rosen.
Senator ROSEN. Thank you, Mr. Chairman. I was presiding and
I appreciate you waiting for me to get here from the floor. First,
thank you for being here and for the work that are doing.
I want to speak a little bit about some of the burdensome report-
ing requirements in the State Trade Expansion Program. We will
just call it STEP. It is a lot easier. It has been essential for Ne-
vada’s small businesses and for our expansion into foreign markets,
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and STEP has provided needed resources to strengthen Nevada’s
economy, our global competitiveness, and including half a million
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16
dollars in STEP funding that we received earlier this month. So
thank you for that.
In 2021 lone, Nevada exported $10.6 billion in goods to foreign
markets. We serve 191 countries and territories. But even with
that great success, those billions of dollars, I have heard from
STEP grantees with concerns about what they fear are SBA’s com-
plex and burdensome reporting requirements and some oftentimes
unclear processes.
So, Mr. Esparza, I have also heard concerns from the State Trade
Offices about problems with the A-STEP online reporting system,
which they use to report expenses. Flaws in the system can create
costly administrative costs.
And so I am interested in hearing what you and your team are
doing to improve the A-STEP online reporting system for both
grantees and the trade offices.
Mr. ESPARZA. Thank you, Senator. As a general principle, I find
it important to make sure that I am listening to the states, to all
of our partners that provide feedback on how our programs, prod-
ucts, and services are functioning, and you have pointed out one in
which I have heard, on several occasions, and acknowledge.
With respect to A-STEP, which is the platform that we use to
gather information from the states on a quarterly basis, it is a plat-
form, a piece of technology that I give my predecessor in the prior
administration great credit for having had the foresight and adopt-
ed. Prior to A-STEP, we were simply collecting Excel spreadsheets
from all the states, an even worse process. And so I give him credit
for having established and had the foresight to invest in and estab-
lish the A-STEP platform.
Now like all technology its rollout can be complicated with hic-
cups, so we acknowledge those and continue to work through that.
I will tell you that I have, not only through feedback sessions,
heard this feedback from the states. But I have now acted upon
that by setting my team out on a mission to understand exactly,
at the nth degree of detail, what these processes are. And where
we can either improve from a technology standpoint or other proc-
esses to eliminate some of the burden and create more efficiencies,
we will make those changes and recommendations.
We are happy to follow up with this Committee on what those
are, but you have my commitment that we will continue to look for
every opportunity to create more efficient processes.
Senator ROSEN. I appreciate that. Our businesses do too. Along
that I would like to talk about expanding the allowable expenses
for our STEP grantees. I am the proud Chair of the Subcommittee
on Tourism, Trade, and Export Promotion in the Commerce Com-
mittee. And so like everyone else, everyone here, including the
Chairman, we all know the importance of small businesses receiv-
ing the resources they need to reach and thrive, of course, in the
foreign markets.
So through the STEP grants, Nevada small businesses are able
to participate in export promotion activities such as export trade
shows, exhibits, trading, market sales trips, and other things to
help diversify their global clientele.
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However, in order to fully empower grantees to achieve STEP
program objectives, and for the SBA to meet key program metrics,
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17
including increasing the number of small businesses assisted, the
value of export sales and return on investment grantees, well, they
just need more flexibility to ensure full utilization of the grants
they receive.
So with this in mind, do you plan to expand the list of eligible
STEP-funded activities and add new allowable expenses to support
our small businesses? If you are not, will you come and engage
with some of my businesses that are working on this? And just how
do I help Nevada businesses, and thus all businesses across this
country, grow in this area?
Mr. ESPARZA. Thank you, Senator, and indeed, international
tourism is an export.
Senator ROSEN. Oh, it sure is.
Mr. ESPARZA. It is simply the presence of a foreign buyer, so peo-
ple bringing their foreign dollars.
Senator ROSEN. Come to Las Vegas any time. We will show you.
Mr. ESPARZA. Absolutely. The original statute had nine expense
categories in STEP, and the tenth being ‘‘any other category that
the associate administrator deems appropriate.’’ So I am consist-
ently listening to and open to feedback.
In our partnership with SIDO, one of the organizations that I
mentioned in my opening statement, we are hearing very specifi-
cally in some of the forums that we conduct what are some of the
ideas of other expense categories that would be relevant. I continue
to listen to those suggestions, and where we find frequent sugges-
tions of the same category we will take those under consideration.
And I hope to be able to, in spirit, to provide as many reimbursable
expense categories as possible.
Senator ROSEN. If you need input, I have Nevada businesses who
are ready to have that conversation.
Mr. ESPARZA. We would be happy to take that input.
Senator ROSEN. Thank you. Thank you, Mr. Chairman.
Chairman CARDIN. Thank you, Senator Rosen, and thank you
very much for your testimony today. I appreciate everything you
are doing on behalf of small businesses.
We will now go to our second panel. And again, thank you, Mr.
Esparza. First let me introduce Shaun Akhavan, the Director of
Exports, Allied International, from Glen Burnie, Maryland. Allied
International Corporation is a leading purveyor of packaged foods
with exception value and quality. For over four decades, Allied
International has gathered the necessary experience and expertise
in this field and has established a remarkable reputation in the
United States and around the world.
Our second witness is Grace Preston. Grace Preston is an inter-
national sales and marketing executive with more than 20 years of
experience. Throughout her career, Grace has helped several U.S.
companies expand their sales into international markets. In 2019,
Grace was awarded the SBA’s Exporter of the Year from New Eng-
land for her work with a New England manufacturer.
Grace joined Geophysical Survey Systems in early 2022, to take
their international sales to the next level. She has traveled to more
than 60 countries and all 7 continents.
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Welcome to both of you. I want to tell you, we appreciate you
both being here. We certainly heard from the Administration. It is
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18
nice to people who are experiencing this firsthand, who have gone
through the struggles of trying to deal with international com-
merce. So thank you for sharing your experiences with us today.
We will start with Mr. Akhavan.
STATEMENT OF SHAUN AKHAVAN, DIRECTOR OF EXPORTS,
ALLIED INTERNATIONAL, LLC, GLEN BURNIE, MD
Mr. AKHAVAN. Thank you, Mr. Chairman. I would like to thank
Chairman Cardin, Ranking Member Paul, and distinguished mem-
bers of the Committee for your time and for allowing me the oppor-
tunity to testify here today on behalf of Allied International Cor-
poration, in support of reauthorizing the Small Business Adminis-
tration’s STEP grant initiative.
Again, my name is Shaun Akhavan, and I am the Vice President
of Export for Allied International Corporation based out of Glen
Burnie, Maryland, a small family-owned business that was estab-
lished over 41 years ago and has been serving the food industry.
Since starting, we have become a trusted purveyor of quality prod-
ucts both domestically and abroad. Our portfolio maintains over
400 items that we offer under the private label brands that we
have created from the ground up.
We credit much of our success in our export sales to the ability
to attend international trade shows. At these international trade
shows, we have been able to meet many potential buyers which
have been instrumental to the longstanding growth of our export
business.
We applied for and received our first STEP grant in 2016. These
funds helped us to exhibit at SIAL Paris trade show in October of
that year. SIAL Paris is one of the world’s largest international
food exhibitions and has been held biennially since 1964. The funds
covered a significant portion of our registration fee and travel ex-
penses. These funds, directly and indirectly, generated over
$200,000 in new export sales revenue in the fourth quarter of 2016
through 2017.
Our success at SIAL Paris 2016 began a new phase for Allied
International’s export efforts. Increased export revenue encouraged
us to exhibit at more international trade shows such as Gulfood in
Dubai, FoodEx in Japan, Seoul Food & Hotel in South Korea, SIAL
Shanghai in China, Anuga in Germany, and others.
Since 2016, we have seen our export sales increase from just 8.5
percent of our total sales in 2016, to 20 percent for the current
year. In addition, we have opened up distribution in over 20 new
markets including Mexico, Central and South America, the UAE,
the greater Middle East, South Korea, Japan, China, and the Phil-
ippines, to name a few. Due to this success, we applied and were
approved for the STEP grant to use toward our upcoming exhi-
bition at the SIAL Paris 2022 trade show next month. Upon our
return, the funds that will be reimbursed to us through this grant
will help us greatly in furthering our business.
In reviewing Allied’s history, where we came from, and where we
are today, we are extremely grateful for the support we have re-
ceived, especially when we were just starting our organized export
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and did not have a substantial understanding of the nuances of ex-
porting or a wide network of business partners.
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19
A grant such as the STEP grant, early on for the start of a com-
pany’s export program, will allow the opportunity, confidence, and
financial assistance to the company for starting an export program
that they may not have otherwise started on their own. Even
though the benefits of attending a trade show are many for a com-
pany that wants to start or expand its export reach, sometimes the
companies need a little extra support to take the first step.
A small business can use the STEP grant money in many ways
to help with the expenses of attending an international trade show.
The money can of course help with any of the travel expenses.
However, in addition to the travel expenses, it can help with hiring
a translator to help with the language gaps, or it can be used for
paying for other learning opportunities such as workshops, lec-
tures, and seminars to expand one’s knowledge of exporting.
One of the most important investments that a company can
make is in a website for international marketing and networking.
Companies can put their names, their brands, and their products
on the web to reach a worldwide audience. They can introduce
their company and its products to customers with whom they nor-
mally would not have the opportunity to connect with in person.
Even in this day and age where technology is so heavily relied on,
many international companies do not have an adequate presence
on the internet and are not easily accessible to those who do not
attend international trade shows.
In working with many countries in various parts of the world, I
know firsthand that there are many opportunities to capture the
business of overseas customers that are very eager and excited to
import American-made products and welcome the opportunity to
connect with American companies. When attending and exhibiting
at an international show, businesses like Allied International can
learn firsthand about these different markets and what their spe-
cific needs are. They can build their export knowledge to build
strong bonds with these eager customers that will continue for
years, if not decades.
The benefits are numerous when I think of the knowledge, con-
nections, and confidence that is to be gained from attending an
international trade show, as well as working internationally in gen-
eral. Providing any support to give small businesses a leg up to
reach these resources can be instrumental to the success of their
export program.
Finally, I would like to commend Michael Howley and the entire
Maryland Department of Commerce for assisting us with our STEP
grant applications.
Senators, Chairman, once again I thank you for all of your efforts
on behalf of the U.S. small business community, and for the oppor-
tunity to appear before you today.
[The prepared statement of Mr. Akhavan follows:]
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Chairman CARDIN. Thank you very much for your testimony.
Ms. Preston.
STATEMENT OF GRACE PRESTON, INTERNATIONAL SALES
MANAGER, GEOPHYSICAL SURVEY SYSTEMS, INC., NASHUA,
NH
Ms. PRESTON. Chairman Cardin and esteemed members of the
Small Business and Entrepreneurship Committee, thank you for al-
lowing me to be here today to provide testimony. My name is Grace
Preston. I am the International Sales Manager at Geophysical Sur-
vey Systems, Inc., GSSI. We are based in Nashua, New Hampshire.
GSSI manufactures Ground Penetrating Radar, GPR, for a vari-
ety of applications such as underground utility location, concrete
inspection, road and bridge inspection, geological assessment,
archeology and forensic discovery. Our products are essential in
maintaining the health of our infrastructure and for advancing sci-
entific understanding of the natural world. GSSI products can be
found in use in over 100 countries and on all 7 continents.
I am here today to speak about the importance of the SBA STEP
grant funding to small businesses like GSSI. Frankly, without the
assistance provided to us through the STEP grant as well as other
state and Federal programs, we would not have enjoyed the sus-
tained level of growth necessary to succeed in an increasingly com-
petitive marketplace. In short, the resources available to us
through these programs have enabled us to have a presence, be
competitive, and succeed in worldwide markets.
Like most small companies, GSSI has limited resources dedicated
to growing business outside the U.S. We are too small to have a
direct presence in foreign markets and must seek partner compa-
nies to promote and distribute our products. A commitment to play
in the international space requires an immense undertaking involv-
ing different languages, different cultures, and often different busi-
ness practices. But also huge potential if one has the patience and
the right help to tackle it. For us, an indispensable part of that
help has come in the form of the STEP grant and the programs of-
fered under this grant.
GSSI first utilized the STEP grant in 2016, to assist in finding
a new partner in Korea. Our feeling was that we were not realizing
the full market potential, but had no way of tapping into it. The
STEP grant was used to fund a Gold Key Matchmaking Service
through the U.S. Department of Commerce’s U.S. Commercial
Service. We have found the Gold Key service to be the single most
effective method for finding a local partner. This service allows us
to put forth the ideal profile of a local partner/reseller and detail
our goals for the market.
Lacking the resources and local ‘‘street cred,’’ the U.S. Commer-
cial Service staff based in Korea worked their local contacts and
knowledge of the market to provide a short list of companies that
they believed to be a match to help us grow our Korean business.
From this, we found one company that rose to the top, and we can
happily report that we have grown our business in Korea by more
than 300 percent. We would have not achieved this immediate, ef-
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fective growth without the STEP funding and the programs offered
under the grant.
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I want to share one really key metric for you. It speaks volumes.
We sold $1.1 million worth of our products in Korea through this
new partner in 2020, at the height of COVID. Imagine where our
company might have been in 2020 COVID time had we not found
this key partner, all as a result from the STEP grant and the dedi-
cated professionals at the U.S. Commercial Service offices in Korea
and in our home state of New Hampshire.
Other examples of how the STEP grant has helped GSSI include
funding another Gold Key Matchmaking Service in Mexico through
the U.S. Commercial Service as well as an Initial Market Check in
Panama. The net result of these two activities was that we estab-
lished a new partner in Mexico that today generates more than
$100,000 in annual sales.
For Panama, we realized that the market was not right for us,
and it allowed us to limit our expenses and our efforts, and we
turned those resources and efforts elsewhere where they were more
needed. Could we have accomplished this on our own? Absolutely.
However, it would not only cost us exponentially more, but could
have taken years to achieve a potentially similar outcome. And as
we all know, time is money, and must be used wisely.
Market intelligence is also a critical foundation to succeed in any
market. When you are not able to physically be in a market more
than one week a year it is difficult to get a full picture of what that
market has to offer, where the government spending is focused,
who the key players are, and what the competitive landscape looks
like.
This year, GSSI was able to fund a market research report via
the STEP grant that provided valuable insight on three markets—
Spain, Norway, and the Philippines. The information we received,
particularly on the Philippine market, has enabled us to basically
‘‘trust but verify’’ some understanding we already had and posi-
tioned us very well in a competitive bid situation. We are confident
that this information will help us win the first major project with
a Philippine Government Authority. Had we not performed this re-
search, it is doubtful our bid would have been taken seriously. Just
another example of how a little help can provide long term success
and growth.
The STEP grant has helped us compete on the worldwide stage
against European, Canadian, and Chinese companies. With some of
these companies supported by their governments, the competition
can be tough. The STEP grant has helped to level the playing field,
giving us the opportunity to get superior American-designed and
American-made products into the hands of an ever-increasing num-
ber of customers around the world. In recognition of our export suc-
cess, GSSI was the proud recipient of the President’s E Award for
Exports in 2019.
Since the initial use of the grant, GSSI continues to utilize the
programs funded through the grant to catapult not only our export
growth but GSSI’s overall growth. Today, GSSI’s export sales con-
tribute to approximately 50 percent of our overall company rev-
enue, and we look forward to continued growth in the coming
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years. This has enabled us to add more jobs. Since 2015, we have
increased our employee count by 20 percent, and we currently have
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24
several open positions in sales, engineering, manufacturing, and
support.
Our export-driven success also contributes to our greater eco-
system through supporting local, regional supply chain vendors,
many of which are within 100 miles of our facility, to offering an
annual $10,000 college scholarship to an employee’s family mem-
ber.
The success beyond our borders helps to contribute to our local
community. Bottom line is that more Americans are working in
good-paying jobs and our local communities are reaping the bene-
fits as a direct and indirect result of this valuable program.
Exports matter. I have built my career on it. Help in achieving
those exports faster and easier is invaluable to GSSI and other
small businesses. Thank you, Chairman.
[The prepared statement of Ms. Preston follows:]
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Chairman CARDIN. Well, I want to thank both of your testimony.
You know, we talk about how important small businesses are to
our economy and community. You all have demonstrated that by
your success in using ingenuity, dealing with the challenges of
today, and figuring out a better way to get a product onto the mar-
ket and being able to get that product into the international mar-
ketplace. As a result, you have created jobs, you have strengthened
our economy. You have done everything we believe small business
can do.
But when you are in international commerce, as you both point
out, there are additional hurdles: How do you make the connec-
tions? How do you deal with the language barriers? How do you
deal with the knowledge of the international marketplace? And you
have given us concrete information as to how the SBA, and particu-
larly the STEP program, but also the International Trade Office
has helped in that regard.
As I said in my opening comments, the member of the United
States Senate that is responsible for the STEP program is Senator
Shaheen. She has been the champion of this program. She has seen
it. She has made it permanent. She has expanded it. She promotes
it. And I want to thank her for her extraordinary leadership. I
think we have two companies here today that have benefitted from
her leadership, and I will now call on Senator Shaheen for her com-
ments or questions.
Senator SHAHEEN. Well, thank you very much, Mr. Chairman, for
that glowing introduction. I really appreciate that, and I appreciate
the testimony of our two witnesses today, particularly Ms. Preston,
who you have given us not only your experience at GSSI, which I
can also attest has amazing technology, having visited there, but
your personal experience with exporting and the challenges that
small businesses faced.
I am sorry I missed our other witness testimony today, but I
know you were equally eloquent.
One of the things that I think is important about the STEP pro-
gram is that it is the only Federal program that supports small
businesses and exporting. And we know that 95 percent of markets
are outside of the United States but only about 1 percent of small
and medium-sized businesses export. So the more we can do to help
provide that assistance to small businesses in identifying those
markets and getting into them, the better. And as you point out,
Ms. Preston, that is one of the things the STEP program has
helped GSSI do.
I wish the Assistant Administrator were here to have heard your
testimony, because one of the concerns that we have heard in New
Hampshire about the STEP program is the potential for it to co-
ordinate better with other Federal agencies. So I wonder, Ms. Pres-
ton, if you could speak to what your experience has been and
whether you see ways in which STEP can better coordinate with
other Federal programs.
Ms. PRESTON. Thank you for the question, Senator, and thank
you for all of your efforts for the great state of New Hampshire.
I think the program, it is evolving, and what worked 10 years
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ago is not necessarily working today. So we have eliminated a lot
of the bureaucratic barriers to accessing the funding and accessing
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29
the programs. I would just say continue on that, and what might
work for GSSI may not work for another small companies. So listen
to the companies. If they are coming to the table with a program
that they want to use the funding for, I would just recommend
being open to that and eliminating barriers to using the grant to
get to those markets that have potential.
Senator SHAHEEN. And you mentioned the bureaucracy and the
paperwork that has often been involved in getting a STEP grant.
Can you talk about what you see that could be done to help reduce
some of that paperwork and how that would be helpful to the com-
pany?
Ms. PRESTON. I think we talked about it earlier when you were
not in the room, Senator. I think the SBA is looking at ways to
automate it and make it easier, but it is not a light-switch moment.
So I think making it easier to just kind of submit all the require-
ments for the funding would help most companies, because we do
not have the resources. We do not have a big staff of people that
can do the work. So it is usually somebody like myself in an organi-
zation that is submitting all of the paperwork and the receipts and
the requests.
Senator SHAHEEN. Thank you. Mr. Akhavan—is it Akhavan?
Mr. AKHAVAN. Akhavan, yes.
Senator SHAHEEN. Do you have anything to add to that?
Mr. AKHAVAN. I either have very, very efficient assistant or the
program is extremely easy to apply for the STEP grant. I never
had a problem. As I mentioned earlier, Michael Howley from Mary-
land has been extraordinarily helpful, and I think it depends on
the individual that is helping us. It has been very straightforward,
very painless, I would say.
So I do not have anything but good things to say about the pro-
gram and the way we have been applying for it.
Senator SHAHEEN. Good. And I assume that both of you would
agree that fully funding the program to the authorized level would
be very helpful. As I look at the performance data for STEP, I
think it is important to point this out into the record, Mr. Chair-
man, that STEP had a return on investment of 42–to–1 for the dol-
lars invested, that STEP grants led to $974 million in export sales,
that assisted over 7,000 small businesses, and enabled nearly 3,000
new-to-export small businesses to explore significant new trade op-
portunities.
So I think in the last year of funding we have significantly un-
derfunded the program. We have not been to its authorized level
of $30 million a year. Would that be helpful if there were more
funding available? Do you think we could see an even bigger return
on those STEP dollars? Ms. Preston?
Ms. PRESTON. Thank you, Senator. I think for us, definitely. It
just helps us with the resources that we have, our limited re-
sources that we have to reach more markets and to talk to more
people and get our products out there.
Senator SHAHEEN. Thank you. Thank you, Mr. Chairman.
Chairman CARDIN. I want to thank both of you again. Mr.
Akhavan, you particularly point out, it is impressive that you went
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from, if I remember correctly, 8.5 percent to 20 percent of your
sales in exports over a period of years, that you received some as-
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30
sistance from the SBA over several years. It was not just a one-
off situation.
Mr. AKHAVAN. Yeah. Since 2016. So up to this year it has
been——
Chairman CARDIN. And the reason I underscore that is that, yes,
we want to help you to attend a trade show. You can make connec-
tions. But that is not the end of the assistance you need in order
to be able to expand your export market.
Mr. AKHAVAN. Well, Chairman, the more we attend the trade
shows, the more credibility we have in front of our buyers abroad.
The first time they see us excited, want to do business with Amer-
ican companies and buy American products. But the more they see
us at these trade shows, and most of these trade shows are annu-
ally. Some of them are every couple of years.
So it really helps with these extra funds for us to be able to at-
tend more trade shows than we possibly can with our own re-
sources. And there are other programs as far as trade missions,
help with data, that you mentioned, and intelligence, market re-
ports. And I think that also helps us with the market for exports.
Chairman CARDIN. Impressive results. Both of you, impressive
results. As I said, you are the model. We know small businesses
will lead our economy. When you go through tough times it is a lit-
tle more challenging. And to get into new markets it is always
more challenging. So I think your testimonies have been extremely
helpful.
Well, our champion, as a small business owner on this Com-
mittee, is Senator Hickenlooper, having gone through the trials and
tribulations as a small business owner. I am going to turn the
gavel over to Senator Hickenlooper so I can go cast my vote, and
I thank him for his leadership on this Committee.
Senator HICKENLOOPER [presiding]. Thank you, Mr. Chair, for
the gavel and all your hard work putting this together, and so
many other good meetings together. I am so glad I made it before
we closed down.
And Ms. Preston, I used to be in the oil and gas business, and
I was a good friend of a guy name Rutt Bridges who created, or
helped create, was a large part of creating the first desktop proc-
essing, you know, desktop computer processing for seismic lines,
way back when in the 1983, 1984, 1985 period, when people did not
do that kind of thing. And his was a very small business that grew
to be a pretty large business.
Anyway, my small business, we spent a lot of time dealing with
government agencies. When I first started I got several SBA loans
and support. But obviously—I owned a bunch of restaurants—I did
not do international trade administration-related stuff.
But I did see much of the red tape and bureaucracy and the time
it takes to work through some of these processes. You know, you
worked through a number of government agencies. What is your
view—and I ask this all the time—of how can we streamline the
process? How would you suggest someone like me, who is inter-
ested in that efficiency, what should I prioritize?
Ms. PRESTON. Thank you for the question, Senator. I am happy
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to be here. Thank you. I think we have a unique situation in the
state of New Hampshire because we do have a couple offices that
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31
lead that charge, so they champion navigating, helping us navigate
through the system. So for us, in New Hampshire, we do have bu-
reaucracy but we have people that are helping us along, and I
think that is very helpful.
I do not know if you have anything to add to that. I think you
had the same experience in Maryland as well, that you have a
champion in Maryland that is helping you through.
Mr. AKHAVAN. Absolutely. We have not had any problem. Actu-
ally, it has been pretty easy, and as I mentioned earlier, painless
to apply and get these grants and work with Small Business Ad-
ministration.
Senator HICKENLOOPER. I love that. That is the best answer I
could hope for. It is not the common answer.
Mr. Akhavan, you know, critical to any assistance program that
we put out there—I can ask this of both of you—you know, are
most small businesses aware of the array, say, the STEP grants,
and what kinds of outreach should we be contemplating to try and
make sure more people are aware of what is out there?
Ms. PRESTON. Thank you again, Senator, for the question, and I
think that is a challenge. I think there are a lot of people out there
that do not know what programs are out there. And in the state
of New Hampshire, the Office of International Commerce from the
state and the U.S. Commercial Service part of U.S. Department of
Commerce, as well as the local SBA office do a lot to outreach and
get the message out.
Again, we are a state of million people. We are spread out quite
a distance, but we have a very small business community. So
again, with the state of New Hampshire I think we are doing very
well with the state and Federal partners we have in getting the
word out.
And also I think reading success stories like GSSI helps people
understand that there is money out there, you know, to help them
along the way, and to help them achieve success in other markets.
Senator HICKENLOOPER. Yeah, I think you are right. Mr.
Akhavan.
Mr. AKHAVAN. Well, in fact, we have been pretty lucky in the
state of Maryland. We have constantly been contacted by the De-
partment of Commerce, asking us what kind of help we need, and
it has been refreshing. A few years back, going to maybe 10 years
ago, when our offices were in Virginia before we moved to Mary-
land, they were equally as helpful, equally as avant-garde in com-
ing and encouraging us to be part of the export market. And it has
just been their encouragement that actually helped us expand our
export sales from 8.5 percent of our total sales in 2016, to over 20
percent this year.
Senator HICKENLOOPER. Let me ask one last question, and you
will hear it just from me. So if you are ready to go you can just
raise your hand and I will let you slip away.
Have you guys worked with any of the fintech companies in
terms of helping you to establish expansion of your export busi-
nesses? Because I have heard a couple of people who have said that
they were more willing to give loans to help expand international
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trade than most of the banks were. That is anecdotal. I am still col-
lecting my anecdotal evidence.
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32
Ms. PRESTON. For GSSI it is really not a good fit for us. It does
not really apply to our market. So I would say no, we have not.
Senator HICKENLOOPER. Okay.
Mr. AKHAVAN. My experience with the export market and our
customers, they are willing to pay 100 percent beforehand. So actu-
ally financing has never been a problem. If they really want to
have us help them they will come up with a 30 percent deposit, and
once we start manufacturing for them and before shipping they will
send the 70 percent.
So I do not think financing is a major problem with export be-
cause people around the world, especially in food products, they
would just love to buy. And as a matter of fact, we were just mak-
ing a joke in the office that we came back from a trade show in
Dubai in February, and few markets, especially Saudi Arabia, we
just have four or five people just want our products. And we ended
up saying, ‘‘Okay, we are going to give you all the products, but we
are going to give you different labels,’’ which has really helped us
capture that market. Still, to this day, when we just came back
from a trip to Singapore—I have been traveling—another customer
from Saudi Arabia said, ‘‘We need your product.’’
So at this time it is refreshing to see that people around the
world want U.S.-made products, because it is equal to quality. And
price has never been a problem because although we are in a very
competitive price market here in the U.S., the price of food is much
higher in the rest of the world, so we really do not have that com-
petition.
Senator HICKENLOOPER. Wow. That is good to hear.
Mr. AKHAVAN. Absolutely.
Senator HICKENLOOPER. Thank you all. We will keep the record
open for two weeks to allow for statements and questions for the
record. So with that this hearing is adjourned.
[Whereupon, at 3:51 p.m., the Committee was adjourned.]
Æ
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