Experts Share Local Resources for Small Business Owners Interested in Exporting to Asia
HOUSTON, December 6, 2021 — In partnership with the U.S. Small Business Administration (SBA), Asia Society Texas hosted a webcast to support small businesses looking to export in Asia. Moderator Dr. Sunny Zhang, founding partner of Z Lab Ventures and assistant professor of marketing at the University of St. Thomas, spoke with Brent Klepko, international trade specialist at U.S. Commercial Services; Eric Miller, Houston Regional Director for Export-Import (EXIM) Bank; and Mark Winchester, Deputy District Director for the SBA Houston office.
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Opportunities in exporting to Asia
As 95 percent of the world’s buyers live outside of the United States, the speakers highlighted the opportunities for U.S. small businesses exporting to foreign markets. Dr. Zhang noted the Asia Pacific region is particularly witnessing the growth of the consumer class, with Indonesia expected to add 70 million consumers in the next 30 years.
In helping companies enter or expand to Asian markets, Klepko said that it is important to have complete risk analysis for each country and to have an export plan. He shared that though individual Asian markets are different, they generally offer consistent standards of paying for services and are serious about business. However, drawbacks might include government interference, corruption, or unfair tender trades.
Support for small business exporting
Each of the speakers mentioned that a major goal of their respective organizations centers on helping business owners get U.S. goods to foreign markets. Winchester shared that SBA, created in 1953, focuses on 4 Cs: capital, contracting, counseling, and crisis. For small businesses interested in exporting, SBA offers export financing (capital) through lenders who participate in the SBA loan guarantee. For the Houston region specifically, Winchester recommended the Houston Association of Government Guaranteed Lenders (HAGGL), and added that SBA also had resource partners such as the Texas Gulf Coast Small Business Development Center and two women’s business centers who could provide additional assistance to small business owners in the area.
Meanwhile, Klepko indicated that U.S. Commercial Services – also part of the U.S. government under the Department of Commerce’s International Trade Administration – has over 170 offices in the U.S. and across the world to aid business owners in exporting U.S.-made goods and services to foreign buyers. It also offers services for small businesses around trade counseling, market research, insurance, promotion/brand awareness, and trade missions.
Miller shared that EXIM Bank has goals to support exporting in an effort to address the U.S. trade deficit, often helping small and mid-sized companies. Miller said the flagship product from EXIM Bank for small businesses is export credit insurance, which insures payment to exporters of U.S. goods or services. According to Miller, businesses that are eligible may pay EXIM a small fee for the policies, which last one year but are renewable and covers two types of risks: commercial (bankruptcy, insolvency, or payment more than 90 days past due) and political (war, currency convertibility, or loss of import license). In his view, EXIM Bank works to complement the loans offered by SBA lenders for small business exporters by removing some repayment risk on the lender side.
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Aid for small businesses during COVID-19
The speakers acknowledged that the pandemic has impacted small businesses broadly, including those exporting to foreign markets. Winchester spoke about the Houston region, where over 37,000 small businesses – including restaurants and those involved in performing arts – were impacted by the pandemic and received over $40 billion in assistance through the Paycheck Protection Program loan or the Economic Injury Disaster Loan (EIDL). He added that the latter is still available to small businesses today.
Klepko explained that any ripple in the supply chain impacts the whole system, but also highlighted significant impacts in China and India’s markets. Miller indicated that export credit insurance played a big role in protecting businesses impacted by the coronavirus, which stalled shipments. He said business owners today share that they are finding success in foreign countries by considering factors such as vaccination rates and government shutdown policies.
Overall, all speakers emphasized the support their respective organizations could offer small business owners interested in exporting, and recommended that interested parties visit their websites for additional information and resources.
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