State Trade Expansion Program (STEP) Grant
The State of Utah has received a State Trade Expansion Program (STEP) Grant to help Utah small businesses enter and expand into dynamic global markets. STEP is funded in part through a Grant with the U.S. Small Business Administration (SBA) and is administered by World Trade Center Utah.
The purpose of STEP is:
- To increase the number of eligible small businesses in the State that export
- To increase the value of exports by eligible small businesses in the State
- To increase the number of significant new trade opportunities for eligible small businesses
STEP is a cost reimbursement grant. Recipients may receive up to $10,000 for various eligible international business activities for the award year. Average awards are between $2,000 – $3,000 per activity. All grant awards require a 25 percent cash match by the grant recipient.
STEP funds can be used for the following four options:
Option #1 – Utilize a Financial Assistance Award
- Allowable travel fees
- Registration fees and booth space for trade shows
- Trade mission fees
- Fees for shipping sample products
- Cost of compliance testing
- Applicant export research tool subscription
- Website translation into foreign language, search engine optimization, and localization services
- Design of marketing media
- Export conferences, meetings, symposium or training programs
Option #2 – Participate in a Governor-led or WTC Utah-led Trade Mission
- Middle East
Option #3 – Attend a State-Led Trade Show
Option #4 – Represent the State as Part of a Reverse Trade Mission
Participants must meet the U.S. Small Business Administration (SBA) eligibility requirements to participate in the State Trade Expansion Program.
The Trade Facilitation and Trade Enforcement Act of 2015, which authorized the State Trade Expansion Program, limits provisions of services to ‘eligible small business concerns’. For purposes of implementing STEP, the SBA operationally defines the term ‘eligible small business concern’ as an entity that meets the specifications below and completes the subsequent certification.
Complies with SBA requirements for self-representation as an eligible small business concern:
- Is organized or incorporated in the United States;
- Is operating in the United States;
- Meets SBA size standards;
- The applicable industry-based small business size standard established under section 3 of the Small Business Act; or
- The alternate size standard applicable to the program under section 7(a) of the Small Business Act and the loan programs under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.);
The SBA size standards are found at 13 C.F.R. Part 121. Click here for information on size standards and click here to link directly to the complete list of SBA size standards used to define small business concerns based on NAICS codes.
- Is not barred from federal funds;
- Has been in business for more than one year;
- Has sufficient resources to bear the costs associated with trade;
- Is headquartered in Utah;
- Is a for-profit business;
- Has one or more full-time employees;
- Has a finished product or qualifying service either directly or indirectly containing 51 percent United States content (click here to learn more); and
- Has an export strategy.
The following small businesses are not eligible for STEP funding:
- Consulting agencies
- Companies, organizations or individuals recruiting foreign direct investment
- Companies engaged in any activity that is illegal under Federal or state law
- Derives more than one-third of its gross annual revenue from legal gambling activities
- Distributors representing clients
- Educational institutions or for-profit schools recruiting students
- Foreign-based companies or more than 49% foreign owned
- Hospitality or tourism operators
- Law Firms
- Multi-level marketing (MLM), direct sales or network marketing companies
- Non-profit organizations, unless a significant portion of activities are to assist entrepreneurs
- Presents live performances of sexual nature or derives more than a minor amount of revenue from the sale of products or services of a sexual nature
- Real estate developers
- World Trade Center Utah reserves the right to limit or exclude previous recipients of STEP funds that have been assessed risk rating
With regard to foreign travel and other costs incurred by STEP eligible small business concerns, the following costs are allowable:
- Fees for shipping sample products. Formerly capped at $2,000. Increased to cap of $4,000.
- Cost of compliance testing existing product for entry into an export market. Formerly capped at $3,000. Increased to a cap of $6,000.
- Export research tool subscription used to assist STEP Clients with market research is allowable as a direct benefit to ESBCs. Formerly capped at $1,000 per award year. Increased to a cap of $2,000 per award year.
- Website translation into foreign language, search engine optimization, and localization services. Formerly capped at $3,000. Increased to a cap of $6,000.
- Design of marketing media (capped at $3,000) commensurate with STEP’s statutory objectives deemed appropriate and approved in advance by SBA. Formerly capped at $3,000. Increased to cap of $6,000.
- Export conferences, meetings, symposium or training programs that pertain to STEP’s statutory objectives deemed appropriate and approved in advance by SBA
- Airfare (consistent with Fly America Act guidelines).
- Ground transportation fees.
- Baggage fees.
- Parking fees.
- Meals and lodging (based on GSA/Department of State per diem rates).
- Registration fees and booth space for trade shows.
- Trade mission fees.
- Currency exchange fees.
- Other associated and allowable travel expenses.
The following costs of STEP eligible small business concerns and You are NOT allowable:
- Passport or visa fees;
- Expenses related to entertaining current or prospective clients or government officials;
- New product development or alteration of existing products; and
- Cellphones and cellphone charges;
- Television and radio production;
- Efforts to create or augment marketing and advertising campaigns to draw international visitors to a state; and
- Printing material for an ‘eligible small business concern’
State Trade Expansion Program (STEP) Grant
Actual and Projected Export Sales – Reporting Definitions
WTC Utah and the SBA requires each STEP recipient to submit the $ value of actual and projected export sales attributable to grant-funded activities. This information helps WTC Utah and the SBA evaluate and improve STEP program management. While generating exports sales is the ultimate goal of the program, STEP recipients are not evaluated solely on these metrics. Successful use of these grant funds should return export sales over time. Reporting unrealistically large amounts of projected export sales that translate into zero export sales only makes STEP management more difficult. You understand your business and sales cycle best. Rely on your knowledge and intuition and recognize that these numbers will likely change over time.
WTC Utah defines actual sale as, “The $ value of revenue completely or partially attributable to your grant-funded activity.” This includes any orders received from a new client during the next two years as well as any increase in sales to current clients during the next two years that you believe is attributable to your grant-funded activities. Please count receivables in this total, even if payment is 60 or 90 days out. While you are obligated to report actual export sales from grant related activities for two years following the grant award, there is no time limit on reported sales. Therefore, if you sign a contract for five years, please report the entire value of the contract up front. While WTC Utah will not follow up with you after the two years are complete, we hope you will continue telling us your international success long after.
WTC Utah defines a projected sale as, “The $ value of potential revenue completely or partially attributable to your grant-funded activity within the next two years.” While this may be difficult to forecast, we suggest using the following guidelines:
- Consider potential client(s) you met directly or indirectly as a result of the grant-funded activity.
- Given what you know about the client and your own sales process, estimate the potential export sales in dollars for that client. If your typical contract length exceeds two year, include the entire contract.
- Repeat the process for each potential client and sum.
***A note on reporting actual and projected export sales:
During the two years following the grant-funded activity, please adjust your reporting of actual and projected export sales as opportunities as won, lost or created. If you project a $10,000 sale, and win a sale for $7,500, please let us know your projected sales from the event have decreased by $10,000 and your actual export sales have increased by $7,500. If in a year, the same customer contacts you for another potential $10,000 sale, please update your total for projected sales.
STEP Project Director