[Senate Hearing 117-732]
[From the U.S. Government Publishing Office]


                                                      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
                            
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                            


        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
                           
                           C O N T E N T S

                              ----------                              

                      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

 
            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 welcome 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 businesses.
    As we continue to recover from the COVID-19 pandemic, 
international 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 consulting 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 issue at that time. She led the effort to make STEP 
permanent 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 concepts 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 Congress 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 
investments 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 
market is vital to our nation's success on the world stage. 
Other countries 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 competitors.
    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 company's revenues, but 
today it is a major growth area for the company 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 
Systems in Nashua, New Hampshire. The company has taken 
advantage of STEP, which has produced great results.
    Congress has an opportunity to help other small businesses 
mirror the growth and job creation of Allied International 
through exports. We cannot let this opportunity pass us by.
    I want to thank each of our witnesses for joining us today 
so we can learn more about the program, and I look forward to 
hearing your testimonies.
    I just really want to point out that in cooperation with 
the Ranking 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 ADMINISTRATOR, 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 
increasingly 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 availability 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 networks 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 
exporters. 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 expanding 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 
internationally. Prior to joining the Administration, I helped 
lead a startup small business that built a modern 911 emergency 
technology platform. 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 development 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 entrepreneurship on a global scale, and I work each 
day at SBA to ensure that our small businesses can find new 
customers to grow and compete internationally.
    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 certain 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 exporters, 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 reimbursement 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 external 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 Federal Government. It is there that we 
advocate for small businesses for all matters related to trade 
policy and trade agreements, bringing 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 
International 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 developing 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 appreciate the invitation to appear before you today, 
and I look forward to your questions.
    [The prepared statement of Mr. Esparza follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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 
business that does not have the staff capacity to understand 
the intricacies 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 underserved communities.
    Do you have any recommendations as to how the STEP program 
can be better tailored to deal with small businesses located in 
traditionally 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 performance, how much has been done to 
provide STEP grants and reimbursements to exactly the small 
businesses that you are talking about, those from underserved 
communities generally, rural communities, 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 
underserved communities helps in a successful application. That 
is number 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 
Administrator 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 businesses, and those specifically from underserved 
communities, to target them for programs like STEP.
    Chairman Cardin. I thank you for that. That is certainly 
extremely 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 international 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 
administrative challenges in dealing with the STEP grant. Can 
you just share with us whether you have dealt with that concern 
by grantees and what efforts you are making to try to make sure 
the process is as easy to administer as possible for those that 
are participating in the program?
    Mr. Esparza. Thank you, Mr. Chairman. I have heard that 
feedback, and I find it particularly important in my 
conversations with states and the state directors managing the 
STEP program that indeed 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 networking 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 capital to make sure that the financing journey of 
finding international sales, working capital in particular, 
access to working capital, 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, 
welcome. My staff gets tired of me saying this, but if you 
cannot measure 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 
entire, 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 sustaining or creating. And then collectively 
across the work that we do is what is the return on investment. 
The Chairman mentioned 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 important these programs are.
    Those are the primary measures. We have some secondary 
measures 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 
sectors, 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 exports. Our work is to try to be able 
to make some of those accidental 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 biggest 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, Senator, over 100 lending partners. These are primarily 
regional banks and community banks. We have a few larger banks 
in the mix, but these are very local banks. And these are part 
of our partnership with the private banking industry. This is 
not us. This is through the private banking industry, where 
they are ready, willing, 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 
supporter 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 happen, 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 
customer base through online platforms? What does SBA do to 
help the small businesses?
    Mr. Esparza. Indeed, Senator. One of the reimbursable 
categories 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 
Business 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 provide 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 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. 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 
companies, 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 
businesses 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 
information on the small businesses that have been helped by 
STEP and how long they last? Because, I mean, is that not one 
of the indicators 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 environment. 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 familiar 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 
program 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 
inquiry 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 challenge with commercial banks, particularly in a 
pandemic, that there would be a challenge as to whether they 
would be interested in these loans, and that we were concerned 
that there would priority-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 effort to make sure that the potentially underbanked 
community received 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 
businesses and with those in underbanked and underserved 
communities, and that worked, to a certain degree. Our later 
numbers were much more successful, and quite frankly, I think 
Administrator 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 number 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 
banking 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 lenders.
    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 
business is 100 percent an exporter. There is always some 
combination of domestic sales and international sales that they 
have. Nevertheless, our products are restricted to only 
international sales or exports. Therefore, a bank looks and 
says, ``Well, unless there is a specific purchase order, unless 
there is a specific amount of inventory 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 continue to work with you and this Committee on is evolving 
our product 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 allows 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. So I think we would be interested in your 
recommendations in this area.
    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 special 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 international commerce but wants to grow to a 
bigger percentage.
    Mr. Esparza. And indeed, Chairman, my team, over 20 export 
finance managers who are spread around the United States, do 
actually 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 underwrite both products.
    Because we know, again, wherever there is a product that is 
useful to a small business, we want to make sure we are 
accomplishing 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 interests 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 
resources partners such as the Women's Business Center or the 
Veterans 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 
fulfilling 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 Representative'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 discussions 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 
reporting requirements in the State Trade Expansion Program. We 
will just call it STEP. It is a lot easier. It has been 
essential for Nevada's small businesses and for our expansion 
into foreign markets, and STEP has provided needed resources to 
strengthen Nevada's economy, our global competitiveness, and 
including half a million 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 complex 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, products, 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 platform, a piece of technology that I give my predecessor 
in the prior administration great credit for having had the 
foresight and adopted. 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 establish the A-STEP 
platform.
    Now like all technology its rollout can be complicated with 
hiccups, 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 processes 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 Committee. And so like everyone else, everyone here, 
including the Chairman, we all know the importance of small 
businesses receiving 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.
    However, in order to fully empower grantees to achieve STEP 
program objectives, and for the SBA to meet key program 
metrics, 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 people 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 consistently 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 
specifically 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 suggestions 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 
international 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 England 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.
    Welcome to both of you. I want to tell you, we appreciate 
you both being here. We certainly heard from the 
Administration. It is nice to people who are experiencing this 
firsthand, who have gone through the struggles of trying to 
deal with international commerce. 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 members 
of the Committee for your time and for allowing me the 
opportunity to testify here today on behalf of Allied 
International Corporation, in support of reauthorizing the 
Small Business Administration'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 established over 41 years ago and has been serving the 
food industry. Since starting, we have become a trusted 
purveyor of quality products 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 expenses. 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 Philippines, to name a few. Due to this success, 
we applied and were approved for the STEP grant to use toward 
our upcoming exhibition 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 received, especially when we were just starting our 
organized export and did not have a substantial understanding 
of the nuances of exporting or a wide network of business 
partners.
    A grant such as the STEP grant, early on for the start of a 
company'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 company 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, lectures, 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 normally 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 specific 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, 
connections, and confidence that is to be gained from attending 
an international trade show, as well as working internationally 
in general. 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 opportunity to appear before you today.
    [The prepared statement of Mr. Akhavan follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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 
allowing me to be here today to provide testimony. My name is 
Grace Preston. I am the International Sales Manager at 
Geophysical Survey Systems, Inc., GSSI. We are based in Nashua, 
New Hampshire.
    GSSI manufactures Ground Penetrating Radar, GPR, for a 
variety 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 scientific 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 sustained level of growth necessary to succeed in 
an increasingly competitive 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 companies to promote and distribute our products. A 
commitment to play in the international space requires an 
immense undertaking involving different languages, different 
cultures, and often different business 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 offered 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. 
Commercial 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, effective growth without the STEP 
funding and the programs offered under the grant.
    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 dedicated 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 established 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 positioned 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 research, 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 number of customers around the world. In recognition 
of our export success, 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 contribute to approximately 50 percent of our 
overall company revenue, and we look forward to continued 
growth in the coming years. This has enabled us to add more 
jobs. Since 2015, we have increased our employee count by 20 
percent, and we currently have several open positions in sales, 
engineering, manufacturing, and support.
    Our export-driven success also contributes to our greater 
ecosystem 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 member.
    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 
benefits 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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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 market and being able to get that 
product into the international marketplace. 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 
connections? 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 particularly 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 comments 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 
program 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 coordinate better with other Federal agencies. So I wonder, 
Ms. Preston, 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 ago is not necessarily working today. So we have 
eliminated a lot of the bureaucratic barriers to accessing the 
funding and accessing 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 company?
    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 requirements 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 organization 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 Maryland 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 
program 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. Chairman, that STEP had a return on investment of 
42-to-1 for the dollars 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 opportunities.
    So I think in the last year of funding we have 
significantly underfunded 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 resources 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 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 assistance 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 
connections. 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 American companies and buy American products. But the more 
they see us at these trade shows, and most of these trade shows 
are annually. Some of them are every couple of years.
    So it really helps with these extra funds for us to be able 
to attend more trade shows than we possibly can with our own 
resources. And there are other programs as far as trade 
missions, help with data, that you mentioned, and intelligence, 
market reports. 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 little 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 
Committee, 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 processing, 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 interested in that efficiency, what should I prioritize?
    Ms. Preston. Thank you for the question, Senator. I am 
happy 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 lead that charge, so they champion navigating, 
helping us navigate through the system. So for us, in New 
Hampshire, we do have bureaucracy 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. 
Actually, it has been pretty easy, and as I mentioned earlier, 
painless to apply and get these grants and work with Small 
Business Administration.
    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 
Department 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 
Maryland, they were equally as helpful, equally as avant-garde 
in coming 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 
businesses? Because I have heard a couple of people who have 
said that they were more willing to give loans to help expand 
international trade than most of the banks were. That is 
anecdotal. I am still collecting my anecdotal evidence.
    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 
actually 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 
because people around the world, especially in food products, 
they would just love to buy. And as a matter of fact, we were 
just making 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 competition.
    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.]

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