From the SBA’s Office of International Trade, we bring you some tips on how to bring production back to America!
Recent studies show that “on-shoring” is likely to increase over the next several years due to a number of factors, such as a need for skilled labor, productivity of the U.S. workforce, stronger quality controls, rising transportation costs, and stronger entrepreneurship and innovation.
The SBA’s International Trade Loan (ITL) program provides small businesses with capital to finance their fixed assets, including real estate, and working capital needs. This program offers private lenders SBA’s highest loan guarantee of 90% guarantee on loans up to $5 million to incentivize lending to small businesses poised for growth.
A small business may use the ITL program to “on-shore” if the business:
1) Seeks to export
Small businesses which currently manufacture products abroad, but want to relocate production to
the U.S. for the purposes of exporting may utilize the ITL program. These businesses may want to relocate to the U.S. to take advantage of increased labor productivity, proximity to raw materials, quality control, re-linking their supply chain or other factors. Small businesses would qualify even
if they intend to sell only one product abroad.
2) Suffers from import competition
American small businesses that sell only to the U.S. market also can use the loan program. These firms must demonstrate adverse impact to their business due to import competition, supported either by a narrative explanation and the company’s financial statements or by a finding of economic injury issued by the International Trade Commission or the U.S. Department of Commerce.
How to Apply for the ITL Program
A small business exporter seeking an ITL must
apply to an SBA-participating lender, who submits a completed Application for Business Loan (SBA Form 4), including all exhibits, to the SBA. Small businesses may contact their local U.S. Export Assistance Center for further information, including a list of eligible SBA lenders in their area, by visiting www.sba.gov/international.
The Small Business Development Center at Wright State has added a federal employee to its roster to help pair local companies with international markets.
“Our job is to get to know our companies in our area and find out which have the potential to sell in foreign markets,” said Deborah Dirr, international trade specialist for the U.S. Department of Commerce. “We’re much more like a consulting firm than we are a government agency.”
Dirr joined the SBDC at the Raj Soin College of Business in January and will staff a permanent satellite office of the U.S. Commercial Service, U.S. Department of Commerce in Rike Hall.
She’s been working for years out of the Cincinnati office and has served the Dayton area for years. Dirr works directly with colleagues in about 75 countries who are hired by the United States to help U.S. companies break into, and in some cases dodge the pitfalls that can occur in, foreign markets.
“For example one big service we offer includes background checks of foreign companies to assess risk,” said Dirr.
That’s important because domestic companies often have limited insight into the current trade atmosphere in foreign markets that can depend on back-room dealings by companies and trade barriers by foreign governments.
Additional services include export relations advocacy, financing programs, distribution recommendations, business matchmaking and help with contract formulation.
This is just the latest example of the SBDC at Wright State’s commitment to provide services to local businesses that might want to go international.
Last fall, in a similar move, the SBDC merged with the Ohio’s top International Trade Assistant Center (ITAC), bringing Kathy Marshalek into the fold following many years of service in the ITAC office in Kettering.
“The local businesses now have access to an export center that will help them determine where in the world are their best markets and help entering and selling into those markets,” said Marshalek. “The students will be able to work with these exporters through internships and educational opportunities.”
The addition of Dirr enhances these capabilities because Marshalek works with state on imports and exports, whereas Dirr is focused solely on exports and works directly with U.S. embassies and consulates.
Dirr serves nine Dayton-area counties on a regular basis and is eager to get to work with new clients who have not yet taken advantage of this service.
“This resource is here and it’s pre-paid,” says SBDC business advisor Earl Gregorich. “They (local businesses) paid for it with their tax dollars.”
International Trade Specialist
US Commercial Service
The Ohio International Market Access Grant for Exporters (IMAGE). is a new grant program funded by the State of Ohio and the U.S. Small Business Administration (SBA). Under this grant, companies can reimbursed up to 50% for approved export expenditures.
Some eligible export-related activities include:
1. International trade show participation – this would include booth space, interpreter fees, participation fees and booth freight costs. If there are any foreign show that you may want to participate in, this is a good way to do so.
2. Services and programs offered by US Dept of Commerce, such as:
– International Partner Search (matchmaking service to find agents, distributors and partners)
– Gold Key Service (IPS plus logistics and meetings set up when in the host country)
– International Company Profile (similar to an international D&B on a foreign company)
3. International trade mission participation (up to $3000) – this would cover participation fees, air travel, lodging, appointment setting fees and other trade mission services. To date, the IMAGE program is promoting the following four trade missions:
Indonesia, Vietnam and Thailand – March 16 – March 28, 2012
Brazil, Chile and Colombia – April 14 – April 24, 2012
India – April 21 – April 27, 2012
Israel – May 12 – May 18, 2012
If you are wondering if these are good markets for your products – we can provide some preliminary market research to help you decide if this is a market for you! Let us know if you would like us to take a deeper look at any of these markets for your products and services – at no cost to you.
4. Select international marketing and technical translation services – the grant funds can be used to translate website, marketing material, technical manual translations and other misc. translations. Let us know if you have specific questions as to what types of translation this fund can be used to reimburse.
5. Other export-related initiatives – these projects must be pre-approved by the State of Ohio.
Our researchers would be happy to provide you with market research reports that identify top markets for your products. That would allow you to determine which of the elements of the IMAGE grants best fits your company and export plans.
I would be happy to further explain any of these options. For additional information, contact Kathy Marshalek, Director, ITAC at WSU, at 937.775.3524 or by email at email@example.com