The U.S. Small Business Administration (SBA)’s State Trade Expansion Program (STEP), which helps businesses obtain grants and find customers in the international marketplace, now allows fees associated with trade credit insurance to be eligible for reimbursement by STEP grants.
SBA has provided more than $200 million in STEP grants nationwide since the program was started in 2011. To increase flexibility within the STEP program, trade credit insurance premiums from private sector providers, and other related expenses such as foreign buyer credit reports, are now also eligible for reimbursement, the SBA said on Friday.
Trade credit insurance protects a business from unpaid invoices caused by customer bankruptcy, default, political risks, or other reasons specified in the policy. It is a valuable tool for small business exporters, allowing the business to determine buyer credit limits and approved terms for foreign buyers while also providing protection in the event of nonpayment.
The addition of trade credit insurance premiums as an eligible use of STEP grant funds applies to all current STEP grant years, the SBA said.
New Jersey was awarded $2.4 million to provide STEP grants in FY2021, which are administered by the New Jersey Business Action Center in the Department of State. Grant awards under the 2021-2022 funding round will be made through September 2023 on a first-come, first-served competitive basis to eligible small businesses selling goods and services to other countries.
For NJ STEP grant consideration, a business must be:
- Registered in, and domestic to, New Jersey
- Small as defined by the SBA
- In business for at least one year as of the date of the application
- NJ tax compliant
- Manufacturing goods or producing services that contain at least 51% U.S. content
- Registered with NJ START and have a DUNS number
To learn more about STEP grants for New Jersey businesses, go here.