The head of the U.S. Small Business Administration, Linda McMahon, spoke in front of the United Nations last week urging small businesses to step onto the global stage.
Reports Friday (May 12) said McMahon is urging the nearly 29 million SMEs in the U.S. to export abroad, telling the UN that just 1 percent of them are currently doing so.
“Businesses that export are less likely to go out of business and more likely to grow faster,” said McMahon in a speech during the Small Business Knowledge Summit on Thursday. “That’s because 96 percent of all the world’s consumers and over three-quarters of the world’s purchasing power are outside the United States. Yet right now, only 1 percent of all of America’s small businesses are exporters.”
She did identify key challenges SMEs face when looking to sell across borders.
“Small businesses are challenged by access to information, capital and barriers to market entry,” continued McMahon, adding that she and the Trump administration will be focusing on helping SMEs gain access to global markets and reducing trade barriers “that disproportionately impact small businesses.”
McMahon also cited struggles SMEs face when seeking financing to help them expand their operations.
“Globally over half of all declined trade finance requests to banks were submitted by small businesses,” she said. “In the United States, over one-third of all of our small businesses fine trade finance hard to obtain for foreign sales.”
Reports did not indicate the origin of these statistics. The summit was organized by the International Council for Small Business.
Research released late last year from HSBC drew similar conclusions regarding the hurdles SMEs must overcome to trade globally. According to the report, the top challenge is a lack of “international business experience and knowledge,” with the majority of SMEs surveyed reporting having only a limited understanding of the local overseas markets to which they would like to export.