The Small Business Administration’s State Trade Expansion Program — IF12149 (updated May 21, 2026)

Summary

A Congressional Research Service product, IF12149, updated May 21, 2026, titled "The Small Business Administration's State Trade Expansion Program," by Adam G. Levin. It describes STEP as competitive grants to state and territorial entities for projects that help eligible small businesses build export activities, with FY2026 grants from $100,000 to $900,000 and $20 million in total awards. It covers allowable uses, the 40% cap for the 10 states with the most small business exporters, and federal shares of 65% or 75%. It notes the CARES Act (P.L. 116-136) extended the utilization period for FY2018 and FY2019 awards and that the FY2027 budget request proposed zeroing out STEP funding, while H.R. 8495 proposed $15 million.

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“The Small Business Administration’s State Trade Expansion Program — IF12149 (updated May 21, 2026).” Original at www.congress.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/if12149-7-d40640dc35/, SHA-256 a8aa529758c4743a97a82457d2cfe3803da0844b3ff543cd6f0f9b5c7622f840.

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Updated May 21, 2026
The Small Business Administration’s State Trade
Expansion Program
American small businesses regularly export to international State Trade Expansion Program Modernization Act of 2024
markets, contributing to both domestic and global (S. 4414) would have, among other things, required SBA to
economies by trading with the approximately 95% of world give unsuccessful STEP applicants recommendations for
population living outside the United States. Due to factors improving their application; established a template for
such as lack of experience or resources, some small awardees to use to fill out program compliance reports; and
businesses may encounter initial challenges breaking into or allowed awardees that did not use the full amount of their
expanding their operations in foreign countries. Starting in STEP grant during the performance period to use up to 20%
2011, the Small Business Administration’s (SBA’s) State of the original grant amount during the first full fiscal year
Trade Expansion Program (STEP) has helped address these after the end of the performance period.
hurdles by offering competitive grants to state and
territorial government entities for projects that help eligible Along with almost all of SBA’s other entrepreneurial
small business concerns (ESBCs) build their export development (ED) programs (such as the Small Business
activities. STEP awards are one of several SBA programs to Development Centers program), the Trump
promote small business exports. Administration’s FY2027 budget request proposed zeroing
out funding for STEP. Discussing ED programs as a whole,
STEP provides funding for a two-year period. For FY2026, the budget request stated that it “eliminates a number of
the grants offered ranged from $100,000 to $900,000. SBA SBA programs that waste taxpayer dollars on failed
anticipated making a total of $20 million in awards. business counseling and training programs.” The
Administration’s FY2026 budget request also proposed
The program has three specific goals: zeroing out funding for STEP.

• increase the number of small businesses exporting; STEP History, Uses, and Outcomes
• increase the dollar value of small business exports; and Congress authorized SBA to create a three-year State Trade
• increase the number of small businesses exploring and Export Promotion pilot grant program—a predecessor
significant new trade opportunities, which includes both to the current STEP—in the Small Business Jobs Act of
new export opportunities and expansions. 2010 (P.L. 111-240). Program advocates argued it would
help small businesses and promote job creation following
Recent Legislation and Executive Actions the Great Recession. The pilot program was funded for two
STEP, which Congress permanently authorized in the Trade years; it was not funded in FY2013; and the current version
Facilitation and Trade Enforcement Act of 2015 (P.L. 114- of STEP has received appropriations each fiscal year since
125), has been the focus of significant legislative activity in ($20 million in FY2026). In 2016, Congress passed the
recent years. The CARES Act (P.L. 116-136) extended the Trade Facilitation and Trade Enforcement Act of 2015 (P.L.
utilization period for STEP awards made in FY2018 and 114-125), giving the program its current name and
FY2019, making them available through FY2021, and permanent statutory authority.
allowed the SBA Administrator to reimburse grant
recipients for financial losses related to canceled foreign STEP grant funds may be used for the following purposes:
trade shows and missions. In 2021, the House-passed Build
Back Better Act (H.R. 5376) would have appropriated $30 • participation in foreign trade missions;
million for STEP for each fiscal year from FY2022 to • Department of Commerce subscription services;
FY2025. The funds would have remained available to the • website fee payment;
program for three fiscal years. • marketing media design;
• trade show exhibition;
In the 118th Congress, the STEP Improvement Act of 2023 • participation in export training workshops;
(S. 77) would have, among other things, required SBA to • reverse trade missions;
collect additional performance data, including the (1) total • procurement of consulting services; and
number of ESBCs assisted, (2) total dollar amount of export • other export initiatives deemed appropriate by SBA’s
sales by ESBCs, and (3) number of ESBCs that have Office of International Trade Associate Administrator or
created new jobs through their participation in STEP. The Deputy Associate Administrator.
legislation would have required SBA to conduct an annual Other program provisions differ slightly among states. The
survey to gather feedback on STEP. Similar legislation was 10 states with the largest number of small business
introduced in the 117th (H.R. 8844, which passed the exporters (in FY2026, those are California, Florida,
House, and S. 5221) and 116th (H.R. 6133, which passed Georgia, Illinois, Michigan, New Jersey, New York, Ohio,
the House) Congresses. Also in the 118th Congress, the Pennsylvania, and Texas) can together receive no more than
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The Small Business Administration’s State Trade Expansion Program

40% of the total amount appropriated to STEP. Notes: Amounts in millions.
Additionally, STEP awards have a matching requirement.
For states with high export volumes (for FY2026, Policy Considerations
California, New York, and Texas), the federal share of Congress may consider the Trump Administration’s request
project costs is 65%, and the required state match is 35% of for no funding for STEP (and to all SBA’s ED programs)
the sum of the federal award and the recipient’s match for FY2027. A House committee version of the FY2027
amount; by this formula, for every $1 of federal funds, the financial services and general government appropriations
state must fund 53.8 cents. For all other states, the federal bill (H.R. 8495) has proposed $15 million for STEP (a
share is 75%, with the state matching 25% of the sum of the decrease from $20 million that the program received in
federal award and the recipient’s match amount, or 33.3 FY2026).
cents for every federal dollar.
Congress may continue its debate on which STEP
In 2021, SBA commissioned an evaluation of STEP by an performance metrics should be regularly reported. This
outside consulting firm. The study found domestic firms could assist in better evaluating the program’s outcomes.
expanding export operations most frequently use STEP With some performance metrics leading to potentially
funds to participate in trade show exhibitions, whereas nebulous conclusions, and with STEP activity concentrated
newly exporting firms most frequently use awards for in a few activities, Congress may wish to determine which
export training workshops. The evaluation found that, from metrics it considers most useful for evaluation and
FY2014 to FY2018, export sales from STEP-funded oversight and what, if any, role those metrics may play in
participation in trade show exhibitions dominated overall driving amendments to the program. S. 77 and S. 4414 in
sales for STEP-funded activities, generating almost $2 the 118th Congress both included a list of mandatory
billion; other export initiatives (including foreign sales performance metrics and required SBA to analyze them.
trips) made $600 million; and foreign trade missions and This could be extended to reporting of STEP ROI, for
reverse trade missions each earned about $200 million. which, as noted, SBA has not issued comprehensively
ESBCs in four states—Michigan, New Jersey, North updated data since FY2023. (SBA’s FY2026 and FY2027
Carolina, and Washington—accounted for 68% of sales budget justifications provided no mentions of STEP ROI.)
from STEP-funded trade show exhibitions. Lastly, the study
calculated that reverse trade missions had the highest return The 2021 STEP evaluation found that some STEP benefits
on investment (ROI) for STEP activities, followed by may accrue unevenly. Between FY2014 and FY2018, 68%
marketing media design and trade show exhibitions. of all STEP-related export sales from trade show
exhibitions were from ESBCs in four states, with one—
SBA has established an annual target average ROI for Michigan—accounting for 36% of export sales. Congress
STEP, although it has not publicly updated that figure since could consider additional rules to ensure ESBCs in all states
FY2025. Average ROI is the dollar amount of small benefit from STEP grants, such as increasing the federal
business exports for every $1 in STEP grants. Figure 1 share of project costs for states that do not have a high
presents actual and targeted average ROI for STEP for volume of exports. Conversely, Congress may determine
FY2018 to FY2023, and targeted ROI for FY2024 and that STEP is working as intended; the 2021 evaluation
FY2025. (SBA has not publicly reported actual ROI for found that ESBCs in states which have participated in
those years.) STEP exceeded the targeted average ROI from STEP the longest had the most export clients.
FY2018 to FY2020. However, STEP did not achieve its
target ROI in FY2021 and FY2022, during the COVID-19 Congress may wish to consider how current and potential
pandemic. STEP matched its target ROI in FY2023, economic and business trends might impact STEP’s design.
although SBA reduced the target ROI from previous years For example, a number of STEP’s most utilized activities,
because of the “effect of canceled trade missions and trade including trade show exhibitions and foreign sales trips,
shows on return on investment due to the pandemic, which require business travel. The COVID-19 pandemic heavily
will continue to lag for several more grant cycles.” diminished the ability of small businesses to travel abroad;
SBA cited canceled trade missions and trade shows in
Figure 1. Actual, Target Average ROI of STEP Grants lowering its FY2023 target STEP ROI. Congress may
consider whether additional allowable uses, such as the
purchase of virtual meeting and conference tools, might
address this issue and help exporting small businesses
compete in an increasingly interrelated world economy.

Adam G. Levin, Analyst in Economic Development Policy
IF12149

Source: SBA, FY2025 Congressional Budget Justification FY2023 Annual
Performance Report.

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The Small Business Administration’s State Trade Expansion Program

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