Export Promotion:

Problems in the Small Business Administration's Programs

GGD-92-77: Published: Sep 2, 1992. Publicly Released: Sep 16, 1992.

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Pursuant to a congressional request, GAO reviewed the Small Business Administration's (SBA) export promotion programs, focusing on: (1) how the 21 international trade subcenters of the Small Business Development Center Program (SBDC) provide export counseling; (2) the subcenters' coordination of their activities with Department of Commerce export promotion assistance; (3) the financial assistance SBA provided to exporters; and (4) SBA management of its export promotion responsibilities.

GAO found that: (1) SBA export programs lack a strategic focus because SBA has neither clearly identified the small businesses' export assistance needs it can best meet, nor targeted its export assistance accordingly; (2) SBA has given little guidance to its SBDC international trade subcenters on how to target or evaluate their export assistance or train their staffs; (3) SBA has been prohibited by law since fiscal year (FY) 1990 from further regulating SBDC subcenters, and although lead SBDC centers in each state can provide necessary guidance, they generally fail to do so; (4) some subcenters targeted the same clientele as Commerce district offices, maintaining that the demand for export counseling services exceeded the supply; (5) some subcenters have given import assistance instead of export assistance, which is contrary to their mission; (6) the SBA Export Revolving Line of Credit Program (ERLC) has been underutilized due to insufficient training of loan officers, poor marketing, and the reluctance of lenders to participate, and SBA has restructured the program somewhat to correct those problems; (7) SBA may have overstated the assistance provided under other financial programs due to inexact reporting practices, as only 40 percent of non-ERLC guarantees could be directly tied to exporting activities; (8) SBA has not consistently emphasized export promotion, as shown by its budget request to reduce its support of export counseling in FY 1993, its failure to fully fund its ERLC pilot program, and its abrupt suspension of financial support to small businesses participating in the Commerce-sponsored Matchmaker program; and (9) management responsibility for export promotion is diffused through several SBA offices, with the Office of International Trade acting primarily as an internal advocate rather than as a direct supervising entity.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: P.L. 102-429 of October 1992 created in law an interagency committee to develop a governmentwide plan for export promotion. The law did not require the plan to define what role SBA is to play in export promotion, but it requires that a unified export promotion budget be developed that funds activities according to a set of explicit priorities.

    Matter: Congress may wish to require SBA to more fully identify which export-related needs of small businesses it can best fulfill and to work with the Trade Promotion Coordinating Committee's small business working group to refocus, if necessary, its export promotion efforts.

  2. Status: Closed - Implemented

    Comments: As required by P.L. 102-429, the first governmentwide strategic plan for export promotion was issued in September 1993, and was updated in October 1994. Neither plan fulfilled the act's requirement to establish governmentwide priorities for export promotion and fund programs in a manner consistent with those priorities. However, SBA has taken some steps to better focus its export promotion efforts. For example, SBA is participating with the Commerce Department and other federal agencies in a nationwide network of Export Assistance Centers ("one-stop-shops"). Further, SBA has harmonized its working capital export finance program with a similar program run by the U.S. Export-Import Bank.

    Matter: Congress may wish to consider requiring the Secretary of Commerce's governmentwide strategic plan for federal export promotion, or any such national strategic plan, to clearly define what role SBA is to play.

 

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