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Washington, D.C.—Today, Rep. Abby Finkenauer (D-IA), Chairwoman of the Small Business Subcommittee on Rural Development, Agriculture, Trade, and Entrepreneurship convened a panel of government officials to hear how Congress can help more small firms, especially in rural areas, export their products. The hearing focused specifically on how Congress can improve the State Trade and Expansion Program (STEP), a federal initiative that provides matching funds and assistance to help small businesses enter new markets overseas.

“Coming from Iowa, I know firsthand that for our small businesses, the ability to export products overseas actually promotes economic success at home in our communities,” said Chairwoman Finkenauer. “Yet, I also know that it is incredibly difficult for the small business in a town like Maquoketa in my district whose owner may want to do business overseas but lacks the staff capacity or doesn’t know where to start. Today’s hearing was a chance to hear how we as lawmakers can ensure our small businesses have these opportunities.”

The STEP program was initially created in 2010 as a three-year pilot. In 2015, Congress enacted the Trade Facilitation and Trade Enforcement Act to make the STEP program permanent and authorize $30 million in funding through Fiscal Year 2020. STEP provides matching funds to states and territories to help small businesses enter new markets, access export financing, and go on trade missions. Since its inception, the Small Business Administration has awarded approximately $139 million in funding to almost every state in the country.  However, government watchdogs have also uncovered some issues with the program including in the realms of compliance and communication. In past and recent reports, the Small Business Administration (SBA) Inspector General and Government Accountability Office (GAO) have issued recommendations to improve the program.

“SBA’s STEP has certainly matured and has benefited from the recommendations my office has made through its work over the years,” said Mr. Hannibal “Mike” Ware, Inspector General of the Small Business Administration. “As I stated previously, SBA has been amenable to our recommendations since the inception of the pilot program and has accepted and implemented all our recommendations from all three OIG reports as well as the advisory. That said, grants management continues to be an issue for the Agency, as we identified in our management challenges report for FY 2019.” 

“In our report, we recommended that the SBA Administrator assess the risk to achieving program goals posed by some states’ low grant fund use rates, and that assessing this risk could include examining the challenges that states reported related to the program’s application and award processes, administrative burden, and communication,” said Ms. Kimberly Gianopoulos, Director, International Affairs and Trade, Government Accountability Office. “We also recommended that SBA enhance collection and sharing of best practices among states that receive STEP grant funds. SBA agreed with these recommendations.”

During the hearing, Chairwoman Finkenauer and Ranking Member Dr. John Joyce (R-PA) probed the government watchdog officials on how Congress can help to make improvements to the STEP program and open the exporting market to more small businesses.

“Today’s hearing was an opportunity to give folks in districts like mine and in Ranking Member Joyce’s, a seat at the table as we discussed solutions that will strengthen opportunities for rural job growth and development,” said Chairwoman Finkenauer. “I look forward to using the valuable testimony we heard today to work in a bipartisan manner to strengthen the STEP program and opportunities for small businesses and family farmers across the board.”

For video of today’s hearing, click here.

For witness testimony and other hearing information, click here.

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