```

[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

   FIELD HEARING IN FOREST HILLS, NEW YORK: OVERCOMING CHALLENGES TO 
                     EXPORTING FOR SMALL BUSINESSES

=======================================================================

                                HEARING

                               before the

             SUBCOMMITTEE ON AGRICULTURE, ENERGY AND TRADE

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                           FEBRUARY 22, 2016

                               __________

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

              

            Small Business Committee Document Number 114-045
              Available via the GPO Website: www.fdsys.gov
              
                                  ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

98-751                         WASHINGTON : 2016 
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                      STEVE CHABOT, Ohio, Chairman
                            STEVE KING, Iowa
                      BLAINE LUETKEMEYER, Missouri
                        RICHARD HANNA, New York
                         TIM HUELSKAMP, Kansas
                         CHRIS GIBSON, New York
                          DAVE BRAT, Virginia
             AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
                        STEVE KNIGHT, California
                        CARLOS CURBELO, Florida
                          MIKE BOST, Illinois
                         CRESENT HARDY, Nevada
               NYDIA VELAZQUEZ, New York, Ranking Member
                         YVETTE CLARK, New York
                          JUDY CHU, California
                        JANICE HAHN, California
                     DONALD PAYNE, JR., New Jersey
                          GRACE MENG, New York
                       BRENDA LAWRENCE, Michigan
                       ALMA ADAMS, North Carolina
                      SETH MOULTON, Massachusetts
                           MARK TAKAI, Hawaii

                   Kevin Fitzpatrick, Staff Director
             Emily Murphy, Deputy Staff Director for Policy
            Jan Oliver, Deputy Staff Director for Operation
                      Barry Pineles, Chief Counsel
                  Michael Day, Minority Staff Director
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Steve Chabot................................................     1
Hon. Nydia Velazquez.............................................     2
Hon. Grace Meng..................................................     4

                               WITNESSES

Mr. Pascual Castano, Business Advisor, NYS Small Business 
  Development Center, Brooklyn, NY...............................     6
Ms. Toni Corsini, NY/NJ Regional Manager, Trade Finance 
  Specialist, Export Solutions Group, Office of International 
  Trade, US Small Business Administration, US Export Assistance 
  Center, New York, NY...........................................     8

                                APPENDIX

Prepared Statements:
    Mr. Pascual Castano, Business Advisor, NYS Small Business 
      Development Center, Brooklyn, NY...........................    21
    Ms. Toni Corsini, NY/NJ Regional Manager, Trade Finance 
      Specialist, Export Solutions Group, Office of International 
      Trade, US Small Business Administration, US Export 
      Assistance Center, New York, NY............................    23
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    None.
 
        OVERCOMING CHALLENGES TO EXPORTING FOR SMALL BUSINESSES

                              ----------                              

                       MONDAY, FEBRUARY 22, 2016

                  House of Representatives,
               Committee on Small Business,
     Subcommittee on Agriculture, Energy and Trade,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:00 p.m., at 
Bramson ORT College, 69-30 Austin Street, Forest Hills, New 
York, Hon. Steve Chabot, presiding.
    Present: Representatives Chabot, Meng, and Velazquez.
    Chairman CHABOT. Good afternoon. This is the Committee on 
Small Business, and we will come to order. The topic of the 
hearing this afternoon is ``Overcoming Challenges to Exporting 
for Small Businesses.'' We want to thank our panel members for 
being with us here in Forest Hills for a timely and important 
discussion on international trade and how small businesses and 
small firms can benefit from increasing their global footprint.
    Before we begin, I sincerely want to thank our ranking 
member, Grace Meng, for inviting me to be with some folks in 
her district and some expert witnesses here today. Grace has 
been a very valued member of the Committee since she joined 
Congress back in 2013, and we are really lucky to have her on 
our Committee.
    We are also lucky to have the ranking member of the full 
Small Business Committee, Nydia Velazquez, who is also here and 
we have had an excellent working relationship for many years 
now. She has been the chair of the full Committee for a number 
of years, and I was her ranking member. We have worked together 
in a bipartisan manner, which does not always happen in 
Congress, but it does on this Committee. We do not agree on 
everything, but we actually agree on a whole lot, and with 
respect to small businesses, we agree with each other on most 
things.
    Always an active participant in our Committee meetings, 
Grace has been a staunch advocate for small business concerns 
at every turn. And she works together with all the other 
members of the Committee really in a bipartisan fashion as 
well. Again, we want to thank you, Grace, for inviting us to 
your district today.
    As a long-time member of the House Foreign Affairs 
Committee and current chair of the Committee on Small Business, 
international trade has continued to be one of the topics that 
I am very passionate about. One of the most important functions 
of our Committee is to look for solutions to help entrepreneurs 
gain access to global markets. Very often our Committee 
discusses ways to grow the economy, and increase the number of 
jobs being created, and sell more goods stamped ``Made in the 
U.S.A.'' All these goals would help the American workforce, and 
all these goals are attainable through trade.
    Simply put, trade means opportunity for small businesses. 
After all, 95 percent of the world's customers live outside the 
borders of the United States. Yet of the 28 million small 
businesses in America, only 1 percent of those small businesses 
sell their goods internationally. If we tear down trade 
barriers, we can make it easier for small business to 
participate in the global marketplace and unleash our Nation's 
most powerful economic force.
    One of the barriers facing small businesses looking to 
export is confusion about how even to do it, and the maze of 
Federal resources only add to the confusion sometimes. The 
Committee recognizes that challenge and is working on solutions 
to better coordinate Federal resources so they are more 
efficient, streamlined, and better able to help entrepreneurs 
navigate the export process.
    The importance of robust international trade for small 
businesses simply cannot be overstated. We must do everything 
we can to help them succeed, and hearings like this allow us to 
learn from those of you on the front lines about what works and 
what does not. I appreciate your taking the time to help 
educate us on what is faced every day by small businesses 
around the country, and I look forward to working with our 
colleagues on both sides of the aisle to keep the doors to 
trade open for small firms.
    I might add that we also had another hearing in Ms. 
Velazquez's district this morning down at City Hall, and it was 
a very interesting hearing. And we were talking about small 
business manufacturers and how to reinvigorate that sector, and 
try to learn around the country what New York is doing right. 
There are an awful lot of things that are occurring right here 
in the small business manufacturing area that hopefully we can 
replicate around the country without taking jobs away of 
course. We want to create jobs all over the country.
    At this point I would like to recognize the ranking member, 
Ms. Velazquez, for the purpose of making an opening statement.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman. I want to thank 
Chairman Chabot for holding a second hearing today. This 
morning he joined me to hold a hearing on manufacturing at City 
Hall. It is not often that the committee holds two hearings in 
one day, let alone both in New York City. So for this, we are 
really grateful.
    I also want to recognize Representative Meng, who has been 
a hardworking member of this committee and a true champion of 
small businesses. She has seized the opportunity to advocate 
for entrepreneurs here in Queens, and I am happy to work with 
her to examine these challenges.
    With foreign trade on the rise, so are opportunities for 
small businesses. Here in New York, there are more than 40,000 
exporters, and nearly 95 percent are small firms with fewer 
than 500 employees. While small in size, these companies have 
made a big impact, generating over three-fifths of New York's 
total exports. According to the Department of Commerce, exports 
alone supported 400,000 jobs in our state. Right here in 
Queens, exporting is critical. With a diverse economy and its 
close proximity to major transportation hubs, businesses in 
Queens are well situated to access international markets.
    This hearing is particularly well timed. This morning the 
committee convened another hearing in Manhattan that examined 
the city's manufacturing base. Not surprisingly, it was made 
clear that foreign markets are essential to the success of our 
local businesses. While local businesses are making inroads 
abroad, they are not without challenges. Among these are the 
time it takes to identify foreign markets, target new 
customers, and learn the ins and outs of the exporting process. 
In fact, nearly half of small exporters spend a minimum of a 
few months a year as well as an average of 8.4 percent of their 
annual operating revenue preparing to export. Compounding this 
obstacle is that they often have fewer resources to expend on 
the developing trade strategy or complying with complex 
regulations.
    Now that we are going to be voting on a trade agreement 
pretty soon, it is important that we discuss what tools are 
embedded in this trade agreement that will enable small 
exporters to benefit. We know, for example, that when we have a 
small business exporter doing business with one country, they 
only have one customer, so that is not enough. We need to see 
how the relevant agencies, whether it is SBA or the Department 
of Commerce, can invest resources to increase small business 
participation so that these businesses benefit with their 
foreign countries.
    In order to help bridge this divide, there are several 
tools and resources available to small exporters. One key 
component is the U.S. Export Assistance Centers, which will 
fill a void by providing access to technical trade specialties 
in over 100 cities and 80 countries worldwide. By delivering 
foreign industry and market expertise as well as trade 
compliance assistance, these centers help small businesses 
navigate the complex terrain of the international marketplace.
    To address some of these problems, the SBA and the Export-
Import Bank provides small businesses specific export financing 
products. Last year, SBA loans generated $1.5 billion worth of 
small business exports while the Export-Import Bank authorized 
more than $3 billion in financing and insurance for small 
businesses. Although those numbers are good, we need to do 
better. If we know that more than 90 percent of all exporters 
are small businesses, we need those numbers to have a 
correlation to the number of small businesses.
    International trade will always be a complex undertaking 
dependent on global macroeconomic trends as well as country-
specific trade policies and resources. Regardless, it is 
critical entrepreneurs are able to compete in this marketplace.
    I would like to thank Chairman Chabot and Representative 
Meng for holding this hearing in Queens and all the witnesses 
for being here today. I yield back. Thank you.
    Chairman CHABOT. The gentlelady yields back. I would now 
like to recognize the gentlelady from this district, Ms. Meng, 
who is the ranking member of the Agriculture, Energy, and Trade 
Subcommittee, which is one of the more significant, one of the 
more important Subcommittees that we have on the Small Business 
Committee. She is a lead Democrat on the Committee.
    Ms. MENG. Thank you, Mr. Chairman, and I want to welcome 
Congressman Chabot to Queens and to New York once again. I know 
it is not your first time, but we are especially privileged 
today to have you in our district, and hope you enjoy the view 
here as well.
    Chairman CHABOT. Very much. Very much.
    Ms. MENG. Also, always happy to see my colleague and my 
friend, Congresswoman Velazquez. We share neighboring 
districts, and Congresswoman Velazquez, our ranking member on 
the entire Small Business Subcommittee, has the difficult job 
of representing parts of three boroughs. And so, any time we 
have you here in Queens, we are always so happy to see you. And 
thank you for advocating for our small businesses as well.
    This is truly one of the best committees I think in 
Washington, D.C. We do try very hard, and are often successful, 
in working in a bipartisan manner on many issues. So thank you.
    Chairman CHABOT. Thank you.
    Ms. MENG. Promoting more trade opportunities for small 
businesses is absolutely essential to creating valuable jobs 
for New Yorkers. As we generate these new employment 
opportunities, we must do so in a way that provides a strong 
foundation for exporters. And this means focusing our attention 
on the challenges that New York small businesses face in 
attempting to export their goods. The New York metropolitan 
area is the second largest exporting market in the U.S. with 
over $105 billion in exports. As a result, exporting is the key 
to our growth, and we must take steps to build on its 
successes.
    With 95 percent of all consumers living outside the U.S., 
trade is critical to small businesses. In fact, 96 percent of 
the nearly 33,000 exporters in New York are small firms, and 
with New York manufacturers selling over $68 billion worth of 
their products overseas, 80 percent of all New York exports, it 
becomes even more important to reduce the burdens they face 
while selling globally.
    In 2014, these exports supported nearly 390,000 jobs, 
showing the real impact that trade can have not only on the 
livelihoods of many small business owners, but also on the 
State's economy. But even with these successes, it is clear 
that our businesses could sell even more goods to foreign 
customers. This is particularly important because small 
businesses that export have reported significant benefits, 
including increased profits and sales and a diversified and 
expanded customer base that provides stability.
    Leveling this playing field is a challenging goal, and 
typically our country has tried to do so through free trade 
agreements. But more often than not, such accords have left 
something to be desired. While these free trade agreements 
benefit some U.S. companies, they often do so at the expense of 
other American companies.
    Opening borders is just not enough. We also have to ensure 
that the rules are not overly burdensome and resources are 
available. While tools exist for business owners to utilize to 
increase their competitiveness abroad, action must be taken to 
make them more efficient. These resources include specialized 
programs that assist companies in selling their products in 
foreign markets. Individually, none of these programs are 
sufficient to shift the balance of the U.S. trade deficit. But 
when taken as a whole, these initiatives can play a useful role 
in stimulating exports.
    Among the agencies providing services are the International 
Trade Administration, which through its U.S. export assistance 
centers can assist in identifying international customers, 
create market and trade strategies, and help with often complex 
foreign rules and paperwork requirements. Other agencies, 
including the SBA and Ex-Im Bank, provide specialized financing 
packages for U.S. exporters. These loans and lines of credit 
are often essential in completing a foreign transaction. Taken 
together, these programs provide the means for New Yorkers to 
identify and win foreign customers.
    Regardless of the many challenges facing small exporters, 
one thing is certain. We need New York's exporters to be strong 
and ready to take advantage of any and all foreign market 
opportunities. As the second largest exporter in the U.S., the 
American economy is relying on us. Given this and the benefits 
that small businesses gain when they engage in international 
trade, it is clear that anything we can do to strengthen the 
ability of small business exporters to compete globally will 
come back to our State many times over.
    I want to thank all of our witnesses in advance today, and 
I look forward to your testimony. I yield back.
    Chairman CHABOT. Thank you very much for your statement. 
And I will just take a moment to kind of explain how the 
Committee process works here and the time rules. We operate 
under what is called the 5-minute rule. It is pretty simple. It 
means each of you get 5 minutes to testify. We will keep track. 
I guess, Joe, who is keeping, you got it over there? Okay.
    The lighting system will be on. The yellow light will let 
you know you got a minute to wrap up, and the red light will 
come on, and that means that you have gone through your 5 
minutes. We will give you a little flexibility if you need to 
wrap up, but, you know, try to keep it close if possible. Then 
we operate under the same 5-minute rule. We will ask questions. 
We may go into a second round if we still have more, or maybe 
not if you have answered our all our questions.
    I would now like to yield back to Ms. Meng for the purpose 
of introducing our distinguished panel here this afternoon.
    Ms. MENG. Thank you, Mr. Chairman. It gives me great 
pleasure to introduce our witnesses for today's hearing. First, 
we have Mr. Pascual Castano, the business advisor at the New 
York State Small Business Development Center in Brooklyn. Mr. 
Castano advises his small business clients to develop their 
business plans and identify avenues for exporting goods and 
services. Prior to joining the SBDC, he worked as the director 
of new business development for a Columbian-based investment 
relations consultant firm.
    We are also pleased to have Ms. Toni Corsini joining us. 
Ms. Corsini is a senior trade finance specialist and New York/
New Jersey regional manager representing the SBA Office of 
International Trade at the U.S. Export Assistance Center in 
downtown New York City. Prior to joining the Federal government 
in 2008, Ms. Corsini held the position of vice president and 
manager of trade services, marketing, and communication for 
North America at a large global financial institution 
headquartered in New York City.
    Ms. Corsini is well known in the business and banking 
communities, having spent over 40 years in trade finance as a 
vice president for commercial banks in both New York State and 
New Jersey, and as an export manager in the manufacturing 
sector. Ms. Corsini has conducted international trade finance 
classes and courses for many years for high-profile 
corporations, and continues to conduct trade finance courses 
for educational institutions in New York and New Jersey. Ms. 
Corsini holds degrees in business management and in banking.
    Thank you both for joining us today.
    Ms. CORSINI. Thank you.
    Mr. CASTANO. Thank you.
    Chairman CHABOT. Thank you very much. Okay, Mr. Castano, we 
will begin with you, and you are recognized for 5 minutes.
    Mr. CASTANO. Yes, thank you.
    Chairman CHABOT. Thank you.

STATEMENTS OF PASCUAL CASTANO, BUSINESS ADVISOR, NEW YORK STATE 
SMALL BUSINESS DEVELOPMENT CENTER, NEW YORK, NEW YORK; AND TONI 
 CORSINI, NEW YORK/NEW JERSEY REGIONAL MANAGER, TRADE FINANCE 
  SPECIALIST, EXPORT SOLUTIONS GROUP, OFFICE OF INTERNATIONAL 
    TRADE, U.S. SMALL BUSINESS ADMINISTRATION, U.S. EXPORT 
             ASSISTANCE CENTER, NEW YORK, NEW YORK

                  STATEMENT OF PASCUAL CASTANO

    Mr. CASTANO. First of all, thank you so much for inviting 
me to be here. I'm glad to be able to have testimony to you and 
show you the work that we do at the SBDC.
    My name is Andres Pascual Castano. I'm business advisor for 
the Small Business Development Center. We're located at College 
of Technology in Brooklyn, and I'm here representing the New 
York State Small Business Development Center. We are a not-for-
profit organization that we're funded mainly by the SBA, as you 
know. New York State and the----
    The New York Small Business Development Center is a not-
for-profit organization that is funded mainly by the SBA, the 
New York State, and the City College of Technology, 
specifically for our center.
    We are part of an extensive network of centers all around 
the U.S. following the same model, and thanks to our partners 
in the private and public sector, we are able to offer our 
services free of charge.
    Through our network of 24 regional centers, SBDC, we 
provide customized solutions through advisement, education, 
research, and advocacy for entrepreneurs, innovators, and the 
small business community. The services we focus on are women, 
minorities, people with special needs, and veterans clients. 
The key areas for our particular Brooklyn SBDC are minority 
women business enterprise certification and mentoring once the 
certification is granted, international trade basic assistance, 
the Barron entrepreneurship, and the New American Empowerment, 
as we do it through our Organization of Latino Entrepreneurs 
called OLE.
    We also offer assistance related to technology and 
innovation, selling to the government, regulatory compliance, 
and disaster recovery. Soon, we'll be offering cybersecurity in 
response to the increase of these specific area of small 
business.
    On a daily basis, most of our clients come into a center 
asking for grants or loans for their respective projects. It is 
important that we advisors ask our clients qualifying to 
determine what is at the root of the concepts, businesses, or 
the reason that they think they need money. We at SBDC do not 
lend money, but we help our clients understand what they truly 
need to be successful to start their business or to improve 
their existing business.
    The ideal outcome is to get each client to understand their 
market, their customer base, their process, and the 
organization for what it is and what it should be. We help to 
increase business intelligence, assisting with financial 
planning, marketing, sourcing, and HR issues. Once a further 
diagnosis is made, one of these areas might become prioritized, 
and a course of action is set.
    Central to our job is to be a mentor for life or as long as 
the client feels necessary. We want to have a long-term 
relationship with our clients, and small businesses have 
different needs depending on different stages. We want to be 
there for them at all stages.
    In relation to exporting and international trade, as this 
is truly an important component of the creation of jobs and the 
expansion of our economy, it is important to consider that 95 
percent of customers are located beyond the U.S. 97 percent of 
exporters are small businesses, but only represent less than 
one-third of the known export body of U.S. goods. The potential 
for exporting for small business is huge, and we need to 
address that.
    At SBDC we understand the importance of educating and 
putting resources available to our clients in this matter. When 
clients reach out to us for exporting assistance, they usually 
become accidental exporters. That means they have the Web site 
and somebody else somewhere in a foreign country find them, and 
they order from them. They are not ready for the actual formal 
process of exporting. When they come to us, they say, oh, we 
find someone. We'd like to explore how it is become a real 
exporter.
    When coming to us, they're usually accidental exporters, 
and they actually don't have the knowledge to take over big and 
continuous orders from overseas, and they usually come with all 
different assumptions or different needs. Some of them come to 
us saying I'm a small business. Exporting is just for big 
companies or corporations. It's just too much for me to deal 
with. I'm afraid I won't get paid. Exporting is too expensive. 
Exporting is only for products, not for services, and I'm 
offering services, so I'm disqualified for that. Exporting is 
too complex, and I need extensive capital or hire a lot of 
employees. They also fear the competition in the local market.
    My role as an advisor at the SBDC is to help our clients 
understand and demystify the exporting process. We do it mainly 
in the initial and exploratory stage. We provide one-on-one 
advisement to assess the client's expert readiness and a set a 
plan of action. We educate and guide them using templates for 
creating an exporting plan that includes market research, 
market entry, legal aspects, compliance, transportation, 
finance, and cultural aspects of the process.
    Through our research network, we help them get the 
information they need to understand their market options. Once 
their business is ready to export, we refer them to our 
partners at the U.S. Commercial Services or other corporations.
    If a business is not doing well, it's possible SBDC might 
not be required. However, if improvement can be made in a 
business, the SBDC is the network to go. Thank you very much.
    Chairman CHABOT. Thank you very much. I appreciate your 
testimony.
    Ms. Corsini, you are recognized for minutes.
    Ms. CORSINI. Thank you.
    Chairman CHABOT. Thank you.

                   STATEMENT OF TONI CORSINI

    Ms. CORSINI. Good afternoon, Chairman Chabot, Ranking 
Member Velazquez, Subcommittee Ranking Member Meng, and other 
distinguished members of the Subcommittee. It is a pleasure to 
testify before you today on SBA's International Trade Program. 
My name is Toni Corsini, and I work as the export finance 
manager for SBA covering the five boroughs of New York, Long 
Island, West Chester, Mid-Hudson, Eastern Upstate New York, and 
the State of New Jersey, for SBA's export financing programs.
    As you know, the opportunities for small business exports 
continue to grow with small businesses accounting for nearly 34 
percent of all U.S. export dollars in 2014, up from 29 percent 
in 2006. But while opportunities exist, the sale will never 
take place if a company lacks the capital to be able to fund 
the transaction. So while the SBA is more broadly involved in 
ensuring that small businesses have the information and 
training they need to get export ready, and in ensuring that 
firms have access to market opportunities by making sure that 
critical rules are included in trade agreements, my division 
works primarily to ensure that companies have the capital they 
need to develop new markets and to compete successfully in 
those markets.
    In terms of connecting small exporters with new markets, 
we've seen great progress through the State Trade and Export 
Promotion Program--you probably know it at as STEPP--through 
which SBA provides competitive grants to States to support 
their small business exporters. I'm pleased that both New York 
State and New Jersey took advantage of this grant program last 
year, and currently are operating with grants of $664,000 for 
the State of New York, and $498,000 for the State of New 
Jersey. Both States help support companies attending overseas 
trade shows, for example, where they can meet new prospective 
agents and distributors.
    With regards to financing, SBA has three targeted loan 
programs that can take a small business from early stage 
exporter to one that needs to expand due to export success. 
Very briefly, I would like to describe the three loan programs.
    As you know, Congress made the Export Express Program 
permanent in the Small Business Jobs Act of 2010, with a 90 
percent guarantee to lenders up to $350,000 and a 75 percent 
guarantee on loans up to $500,000. Proceeds can be used to fund 
any export development activity, including attending foreign 
trade shows, translating literature, product modifications, et 
cetera, as well as financing early transactions and for 
equipment and real estate used in the production of goods and 
services for export. This is a delegated lender program, 
meaning that SBA provides expedited approval for such loans 
typically within 36 hours.
    Secondly, the Export Working Capital Program provides a 90 
percent guarantee on loans up to $5 million which can finance 
the entire export transaction cycle from purchase order to 
collections. These are loans that my office helped structure 
and underwrite working directly with lenders throughout my 
territory.
    Thirdly, if a company becomes successful and needs to 
expand its plant and equipment as a result of increasing export 
sales, SBA can provide a 90 percent guarantee on an 
international trade loan, a term loan that can fund permanent 
working capital up to 10 years, and real estate up to 25 years 
to ensure that the company can expand and remain competitive in 
global markets.
    Although any SBA loan can support an exporter, we feel 
these three targeted loan products have been very successful in 
being able to take a small business from the early stages of 
developing foreign to helping them expand due to export 
success. In Fiscal Year 2015, SBA approved 1,777 loans to 
exporters for over $1.4 billion. Of those, 547 loans were one 
of the three core loans mentioned above for $730. Both 
categories of loans were records for SBA, even during a year 
when overall U.S. exports decreased 4.8 percent. In my 
territory alone, 96 loans were made to small business exporters 
totaling $67 million, which were estimated to have supported 
over $100 million in export sales.
    Thank you for the opportunity to speak with you today about 
SBA's export finance programs, and I would be happy to take any 
of your questions.
    Chairman CHABOT. Thank you very much.
    I would like to yield to Ms. Meng to ask the first 
questions since we are in her district.
    Ms. MENG. Thank you, Mr. Chairman. So unfortunately, 
Cassidy Schultz Brush, the founder of Urban Chandy, who is one 
of our local New York businesses, could not be with us today. 
But, Ms. Castano, I believe you worked closely with her on 
providing export assistance that she needed for her business to 
succeed. Can you share with us some of the initial questions 
that she had or came up with, and how exporting helped her 
business overall?
    Mr. CASTANO. Right. Cassidy is the owner of an innovative 
basis. She manufactures chandeliers and light fixtures. She has 
been business for about 3 years now, and when she came to me 
first, she came originally as many of our clients looking for 
funding. I helped her get the funding that she needed through 
the process of helping her with her credit and getting her 
ready for that.
    In the meantime, we helped her in other different areas, 
like I helped her get certified as a minority for New York 
State, and also figuring out the different avenues for 
exporting. To date, she exports to Mexico, to Canada, and 
Australia. So like I said, she came at the beginning as an 
accidental exporter. Somebody contacted her. She knew there 
were some options out there, and then we started focusing on 
that. That is the case. To this date, we help her through our 
research network to figure other markets that can be good 
potential for her, and getting ready for taking bigger orders 
in the future.
    Ms. MENG. How long would you say it took from the initial 
moment that she wanted to start shipping overseas to when it 
actually happened? What was the time frame?
    Mr. CASTANO. For her, she has already some contact outside 
when she first contacted me, so it did not take her that long. 
We are now in the process of figuring out other potential 
markets and how she can really increase her productivity and be 
actually able to manufacture they look for in some other 
countries.
    Ms. MENG. Ms. Corsini, what is the most common problem you 
hear about from New York's exporters?
    Ms. CORSINI. The most common problem continues to be really 
capital access. My interaction is directly with the lenders, 
and I obviously get many phone calls, and I interact on a 
regular basis with the small businesses. And in some instances, 
the small businesses are not really prepared to sit down with 
the lenders, traditional lenders, so certainly we work in 
conjunction with all the SBDCs and SCORE. I cannot tell you how 
many times I get phone calls from people that really do not do 
not have a business structured. So sometimes it is a matter of 
just kind of giving them guidance and helping them.
    One of the tools that I thought was very good that SBA put 
in the internet a couple of years ago is the Export Business 
Planner, which is an online tool. It is free to everyone. 
Anyone can go into it. It is just 
www.sba.exportbusinessplanner. It guides them so that if they 
have not thought of the structure they need, it gives that to 
them.
    Once they have gone past that, once they have a company and 
all that, it is really getting the financing from the 
commercial lenders. Our programs are very good. Our SBA 
programs are very good. But we cannot really direct the 
strategy at the lenders, so unless they are willing and able to 
offer the programs, it is a bit of a challenge for us as well.
    Of course, banks are structured at different levels for 
their lending. For instance, we might have the Export Express 
Program, which is a very good program, but it is the lower end. 
The banks do not want to dedicate resources, or they may feel 
that that is a lower end of a client that they are really not 
looking for.
    I was very happy when I joined government in the SBA 
because within short order the maximum went from $1.5 to $5 
million. I was thrilled because that meant that I could 
actually have the dialogue with commercial lenders, and that 
was kind of the lower end of commercial lending, but it gave a 
great opportunity. Anything we can do to encourage the lenders 
to open up the availability to capital, to the exporters, is 
really the key to this.
    Chairman CHABOT. The gentlelady's time has expired.
    Ms. MENG. I yield back.
    Chairman CHABOT. Yeah, we will get to a second round if you 
have some more questions. I will now recognize myself for 5 
minutes. I will begin with you, Ms. Corsini, if I can.
    Now, you are with the SBA, the Office of International 
Trade. The SBA, of course, is the Small Business 
Administration, so you are the government. You are the entity 
within the Federal government that this committee has most 
direct oversight, interaction with, and works with. And one of 
the principal things that you all do is guarantee loans. You 
mentioned access to capital and that being a big challenge. 
That is one of the most important things that you all do 
through the 7(a) Program, and the 8(a) Program, and the 504 
Loan Program, and all those types of things.
    My question, again, keeping within the confines of the 
purpose of this hearing on international trade, of all the 
business in the area that you have oversight over, which you 
mentioned is the State of New Jersey I guess, right?
    Ms. CORSINI. Yes, the whole State.
    Chairman CHABOT. Plus a lot of places in New York. Of all 
the businesses that sell their products overseas, what percent 
would you say of those businesses that you all actually 
directly interact with in working with them on their trade 
deals?
    Ms. CORSINI. We are working with the lenders, so that is 
the core. In other words, I do not have statistics specifically 
on the companies because we are working with our approved 
preferred lenders, and we are working to try to get more 
lenders to offer the three export programs specifically that I 
represent. That is my core role.
    Chairman CHABOT. I did not directly mean the businesses 
that are doing it. I meant through the lenders. The point that 
I am getting at, would it be accurate to say that most of the 
businesses that do do their trade internationally do not work 
necessarily through the government. They find ways of dealing 
with the private sector?
    Ms. CORSINI. Oh, of course. Of course. Of course.
    Chairman CHABOT. I assume it would be a very high 
percentage that do not go through us. They do it on their own.
    Ms. CORSINI. Yes. Well----
    Chairman CHABOT. Probably 90 or more probably do it would 
you say?
    Ms. CORSINI. I cannot really say that for certain, but we 
can presume. What I would say is certainly if a company is 
credit worthy to begin with and now they have export 
opportunity, they can get their financing for that. They would 
not need the Government Guarantee Program. The Government 
Guarantee Program, as we try to advance it, is to encourage the 
lenders to use that as a tool to sell it internally to their 
internal credit committee and to go forward.
    You understand, as I am sure you do, that U.S. banks do not 
like foreign receivables. A company that has either, you know, 
80 or 90 percent foreign sales is not going to be considered, a 
comfortable risk, if you will, from the banking committee. That 
is definitely where our guarantee programs come in.
    But with respect to a financially sound company that now 
has export opportunity, they can get the funding directly on a 
traditional level from the lender.
    Chairman CHABOT. Thank you. Mr. Castano, just for the folks 
that are here, anybody this might be exposed to beyond the room 
and the folks that are here today, could you kind of explain 
what a SBDC is and what they are for, that sort of thing?
    Mr. CASTANO. The SBDC is a network of centers located all 
over the U.S. We work with having the same model, the SBA the 
Federal agency as the main funder. And each State and the 
college where the center is located has the main partners. We 
offer technical assistance, like we offer advisement, location, 
research, and advocacy to all innovators, and entrepreneurs, 
and existing business. We are open to the public, and our 
services are free of charge.
    Chairman CHABOT. Okay. Either one of you, and Ms. Meng 
already touched on this, but could you go through some of the 
most significant challenges that a small businessperson has if 
they decide that they do want to trade internationally? What 
are kind of the roadblocks? What are the things that you see 
that can be most frustrating to them? Either one of you that 
wants to answer the question.
    Ms. CORSINI. Why do you not go first, and then I will----
    Mr. CASTANO. Yes.
    Chairman CHABOT. Okay.
    Mr. CASTANO. Definitely one of the biggest challenges that 
are out there for small businesses is to be able to demystify 
the fact of risk involved in payment. A lot of the small 
businesses, they are not familiar with payment assistance, 
international payment assistance, so they do not know about 
that. And they fear that they are not going to be paid.
    Chairman CHABOT. By ``demystify,'' you mean basically they 
have this idea of what it might be like, but they really do not 
know.
    Mr. CASTANO. Right.
    Chairman CHABOT. What you do not know is pretty scary.
    Mr. CASTANO. Right.
    Chairman CHABOT. Why deal with that at all?
    Mr. CASTANO. Right, that is correct. When they come to us, 
so we help them understand what are the options so they feel 
comfortable knowing that they can make it without going tech 
nervous.
    Chairman CHABOT. Ms. Corsini, did you want to take a look 
at that?
    Ms. CORSINI. Yeah. The benefit of the U.S. Export 
Assistance Center, which you mentioned and where I belong 
actually here locally is really, especially here in New York we 
have all three agencies, sister agencies represented. So the 
companies have the benefit of getting connected with the 
resources from the Commerce Department, which we have at the 
U.S. Export Assistance Center, with small business for 
financing, and then certainly with Ex-Im Bank. We work in 
conjunction, all three of us. We have a standing joke every 
time we go out to do a presentation because we know the 
sequence of how this is going to take.
    The company can identify through the Commerce Department 
warm leads with respect to their gold key services. We can help 
them with the financing through our export programs and 
participating lenders. Then certainly if they want to be 
competitive and want to sell on an open account basis, we work 
in conjunction with Ex-Im Bank to provide the credit insurance.
    It is kind of a one-stop-shop, which was the concept 
originally, and they do have the benefit of that. Each time 
that there is an outreach, whether it is coordinated by the 
Commerce Department, or Ex-Im Bank, or even SBA, we do work in 
concert to try to give the small businesses the advantage to 
know that these resources are there and available to them.
    For me personally, I do a lot of seminars and things of 
that nature, and certainly I work with our SCORE counterparts 
and with the SBDCs in the territory that I cover.
    Chairman CHABOT. Okay. When we talk about SCORE, we are 
talking about people that are basically retired from their 
business and want to give back to other folks who are maybe 
going to start their own business up.
    Ms. CORSINI. Absolutely.
    Chairman CHABOT. They do not have to reinvent the wheel 
here. Somebody else has already kind of done that, and that is 
who these folks are.
    Ms. CORSINI. Right. Right. Right.
    Chairman CHABOT. Okay, thank you. I would now recognize the 
gentlelady from New York, the ranking member of the Committee, 
Ms. Velazquez.
    Ms. VELAZQUEZ. Thank you. Thank you for being here. Ms. 
Corsini, you know, we always hear that there are 28 million 
small businesses in this country, right? But many U.S. 
businesses do not consider foreign trade a priority. What do 
you think it takes to change that mindset?
    Ms. CORSINI. Well, in my own personal experience outside of 
government all the years that I spent in banking, kind of 
echoing what has been said, there is a fear factor. There is an 
uncomfortable factor in that this is a big country, so a lot of 
people are accustomed to just dealing from the East Coast to 
the West Coast. If something goes wrong, oh, they call their 
attorney and they can sue, and everything is going to turn out 
all right. They do not have to worry about possibly dealing 
with a foreign language, dealing with distance or things of 
that nature.
    Just as an aside, many times what we tell people just to 
give them a comfort level, you want to start small. Start with 
Canada. It is just over the border. They are very nice people.
    [Laughter.]
    They like us. It is that fear factor. Again, to echo what 
was said by my colleague here, a small company does feel and 
they have a preconceived notion that international business is 
really for the big guys, not for the small companies. It is an 
inbred mindset here in the United States.
    In other countries, as you know, the borders are very 
close. The countries are very close. It is just a given you are 
always trading with another country. But here, because of the 
way we are structured, they fear what they do not, and they 
feel that their company is going to be injured. So it is up to 
us to try to break that.
    Ms. VELAZQUEZ. Right. So information is power, right?
    Ms. CORSINI. Absolutely. Absolutely.
    Ms. CORSINI. What I see here is that there is a wealth of 
opportunities out there.
    Ms. CORSINI. Right. Right.
    Ms. VELAZQUEZ. Pretty soon we are going to be voting on a 
trade deal with 12 countries. The way it is being sold is it is 
going to help America and American workers, and it is going to 
help small businesses. But the numbers do not match up.
    We have a challenge here because it is not only the fear 
factor. The fear factor is triggered by processes and 
complexities of doing business with foreign countries. What can 
you do to help provide the type of information that is needed? 
What type of outreach do you do in order to bring the 
information to where those local businesses are located?
    A lot of them, it is natural. We have so many immigrants 
that are entrepreneurs. How can we help link the possibilities 
that exist in those countries with the businesses here?
    Ms. CORSINI. Well, again, the outreach is one that is 
combined. In other words, the product that someone might have 
has to be determined whether or not it is a product that will 
sell and what markets it might sell into. If a company calls me 
and contacts me and they are just beginning, just to repeat, I 
work in conjunction with the Commerce Department and direct 
them to the local office. With respect to any specific 
outreach, at least once or twice within like a quarter, I am 
doing a seminar either on the programs, the SBA programs, or 
specifically on the methods of payment, which was mentioned by 
my colleague here, so that they get a sense, whoever signs up 
for these things. They are usually all free.
    They get a sense that they can do the business. They will 
get paid. You know, their company will not be injured, and that 
there are resources that they can turn to so that they can get 
themselves together. Outreach is really the key with respect to 
seminars and things of that nature. I mean, the Federal 
government does not advertise. If we were, doing commercials it 
would be a little bit----
    Ms. VELAZQUEZ. Well, you know what? In those communities--
--
    Ms. CORSINI. Yes.
    Ms. VELAZQUEZ.--where people look like me and Grace, they 
read all those local papers. Do you use those newspapers to 
publish information so that they learn how to connect with you 
and SBA----
    Ms. CORSINI. Well, everything is on the Web----
    Ms. VELAZQUEZ.--trade promotion programs that exist?
    Ms. CORSINI. Yeah, of course. Everything is on the Web 
site, on the SBA Web site. I do not know of anything directly 
in the regional papers here, but everything is on the website.
    Ms. VELAZQUEZ. In terms of financing, I always say that 
access to capital is access to opportunity. And so, besides the 
programs that provide guaranteed loans, can you tell me the 
average size of the loans for small businesses?
    Ms. CORSINI. Yeah, actually I do have that. Let me just get 
my details here. There were some statistics given to me for SBA 
overall. SBA saw an 8.1 increase in all loans to exporters with 
an 8.9 percent increase in loan volume to $1.45 billion that we 
spoke about from $1.34 billion in 2014. So that is 2015 figures 
versus 2014.
    Ms. VELAZQUEZ. I know. I would like to know in terms of the 
portfolio the average loan is for $250,000, $300,000?
    Ms. CORSINI. Actually the export loans range about $800,000 
to $1.3 million for the export loans. That is outside of not 
7(a) or 504 or anything like that. It is just the export loans.
    Ms. VELAZQUEZ. Sure. Those are guaranteed, right?
    Ms. CORSINI. Those are guaranteed, yeah. Those are the type 
of loans that I discussed, yes.
    Ms. VELAZQUEZ. Let me ask you another question, and maybe 
you could also comment.
    Mr. CASTANO. Yes.
    Ms. VELAZQUEZ. Do you have any type of relationship with 
Ex-Im Bank?
    Ms. CORSINI. I'm sitting in the U.S. Export Assistance 
Center, so my colleagues there and I, we are partners.
    Ms. VELAZQUEZ. Okay.
    Ms. CORSINI. You know, we are all partners. All three 
agencies are partners in the U.S. Export Assistance Center. By 
relationship, actually when I first joined, since we only had a 
$1.5 million cap, if we had to put a loan for, let us say, $2 
million, we had to borrow, if you will, some of that ability 
via a co-borrowed loan with Ex-Im Bank. But once we had the $5 
million cap, we did not have to rely on that anymore.
    We work very closely for the credit insurance feature, and 
there is a 25 percent reduction in premium to the exporters if 
they get an SBA loan and they get the credit insurance from Ex-
Im Bank. That is reciprocal.
    Ms. VELAZQUEZ. You know that we went through a big fight to 
get the Ex-Im Bank reauthorized, right?
    Ms. CORSINI. Reauthorized, yes.
    Ms. VELAZQUEZ. Many people accused the Ex-Im Bank of being 
a bank that basically promotes corporate America. There is a 
cap, at least a ceiling, of 20 percent of lending from Ex-Im 
Bank to small businesses. But that does not mean that they 
should not go beyond the 20 percent, and that is an area where 
we need to do a lot of work because the mission of the Ex-Im 
Bank is to provide the kind of lending that would allow for 
small businesses to compete overseas.
    20 percent is still very low, and they did not achieve the 
20 percent until 2014 after so much criticism coming from this 
lady here.
    Chairman CHABOT. The gentlelady's time has expired.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman.
    Chairman CHABOT. Thank you. The gentlelady from New York 
again, the ranking member is recognized for 5 minutes.
    Ms. MENG. Thank you, Mr. Chairman. I have a follow-up 
question based off of what Ranking Member Velazquez asked. So 
several Federal agencies offer these different export promotion 
programs. You mentioned trade missions, foreign-based 
matchmaking fairs. The STEPP Program you mentioned. At the 
local level, are you seeing New York-based businesses actively 
participating in these trade missions? Do you feel that, and 
either of you can answer, that you have enough resources to be 
able to reach out to the diverse communities that we have 
discussed?
    Staff, for example, maybe with multilingual abilities. You 
have mentioned good Web sites and links. Are there ways to 
access in different languages with different communities? I am 
just curious.
    Mr. CASTANO. Yes.
    Ms. CORSINI. Well, I just want to mention, the SBA Web site 
is also in Spanish, so there is a whole component in Spanish. I 
do not know if there are any other languages on the table, but 
it is definitely English and Spanish.
    Ms. MENG. Are there plans to have other languages?
    Ms. CORSINI. You would have to talk to the administrator 
about that. I am not privy to that kind of information.
    Ms. MENG. Thank you.
    Mr. CASTANO. Our SBDC office, as I mentioned before, we 
focus on veterans, and minorities, and women-owned businesses, 
and we do have the people who will speak different language. We 
have one advisor. She is specifically working on veterans, and 
the one representing the Hispanic-Latino community, and we use 
our brand OLE, the Organization of Latino Entrepreneurs, to 
reach them. We do have access to them I can say.
    We help through a process of expiration, and once we see 
that they are ready to export, then we refer them to other 
agencies. That is the basic thing. We want to be able to help 
them get where they need to be to the trade missions, to go to 
the other services now available out there. I will let them 
know that they exist and how to get there.
    Ms. MENG. I also want to thank you as part of a larger SBDC 
family for helping so many of the entrepreneurs and small 
business owners in our district, Congressional District 6. We 
unfortunately do not have a center of our own, and while you 
are front of me, I would like to continue to push for your 
support----
    Ms. VELAZQUEZ. We did not have funding.
    Ms. MENG. Right, more funding.
    [Laughing.]
    Thank you, Congresswoman Chabot, for being here. So thank 
you also in advance for continuing to help our small business 
owners.
    Mr. CASTANO. Thank you.
    Ms. MENG. I yield back.
    Chairman CHABOT. Thank you. The gentlelady yields back, and 
I yield myself for 5 minutes. Following up on a couple of 
things that Ranking Member Velazquez said, and I thought they 
probably deserve the other side at least getting, because some 
of our colleagues look a little differently about, for example, 
the Ex-Im Bank, which has been around a long time. Some of our 
colleagues would argue that it was corporate welfare, and that 
when we reformed the welfare programs for lower income folks 
and welfare reform under President Clinton years ago, that, we 
really did not touch on the big guys, so to speak. This is one 
of those programs.
    It does affect small businesses as well, and that is what 
we are about here. But, large companies, for example, GE 
Aviation which is headquartered in my district in Cincinnati, 
was a big fan of this program. I can remember having many 
discussions where we were not on the same side on this 
particular issue.
    Some of our colleagues would argue that if the Ex-Im Bank 
went away, the private sector would ultimately find ways to 
adequately determine what the true costs should be of loans 
that are being made so that they could move forward in other 
countries. Right now they do not have to do that because the 
Ex-Im Bank is there, and so it artificially changes the true 
atmosphere and the cost of doing business, et cetera, et 
cetera.
    There is another point of this. The ranking member's point 
of view prevailed in Congress overwhelmingly, I think 300, 140 
or something like that, so the program was continued, and so 
the funding was there. There was a period of time when nobody 
knew for sure how this was going to play out, and a lot of 
people were quite concerned about that. And a number of things 
were not moving forward. But it did pass, and that did happen.
    The gentlelady also brought up the fact that we are talking 
about a pretty significant trade deal with a dozen or so of our 
Pacific Rim allies, and it is a very controversial agreement. 
Everybody is kind of looking at the United States and what are 
we going to do about this. Some of the major candidates on both 
sides have come out pretty strongly against it, including 
Donald Trump on the one side and Hillary Clinton on the other 
side, have both come out against it.
    I think it could be a big deal, but certainly there are 
many points of view on this whole thing. I spoke at the 
National Press Club to the Kaufman Foundation last week. During 
the course of that made some comment because they had asked 
about trade. I said that I doubt if this is going to move 
forward in this Congress at this point. Maybe next time, but I 
am not sure about this one.
    I tend to be for free trade overall personally and think 
that it does means jobs in both the U.S. and the other 
countries, it raises all boats. It helps everybody although 
there are some people in this country that do lose their jobs, 
no question about that. The argument is do we create more jobs 
here than we lose, and I would argue yes, but others would say 
no. It is a very challenging thing for us to do. TTIP is 
another deal that we have, and that is with Europe.
    I do not want to throw a grenade out there to you all, but 
did you want to comment on either TPP or TTIP?
    Ms. CORSINI. The only thing I would say in general terms is 
that statistically it is has been shown that usually with 
either bilateral or multilateral agreements, U.S. exports do go 
up. Companies do find opportunities that perhaps they did not 
have before, or they see that the opportunities are a little 
bit easier to sell their products to those particular 
countries. I think I will just leave it at that.
    [Laughter.]
    Chairman CHABOT. That is really wise. Mr. Castano, did you 
want to----
    Mr. CASTANO. Yes. Exporting is definitely, one big way of 
improving the economy, creating jobs. Companies that export are 
8.5 percent less likely to go out of business. That is another 
issue that we need to consider.
    Chairman CHABOT. My time has just about expired, so I will 
yield back the balance of my time. Would either Velazquez or 
Ms. Meng?
    Ms. VELAZQUEZ. Yes.
    Chairman CHABOT. Okay. Back to Ms. Velazquez. You are 
recognized.
    Ms. VELAZQUEZ. Ms. Corsini, what are some ways that 
promotion programs can be improved? You are on the ground, you 
work with the businesses, you represent the programs. Is there 
anything that should be changed, modified, or fixed to make it 
more effective?
    Ms. CORSINI. The programs themselves you are talking about.
    Ms. VELAZQUEZ. Yes.
    Ms. CORSINI. Well, I guess----
    Ms. VELAZQUEZ. Or that could be more responsive to the 
needs of small businesses.
    Ms. CORSINI. Well, my response is going to be very personal 
because I do work with all three programs. I would say 
initially I do not really understand, and my colleagues have 
not really explained the historical aspect to me, as to why our 
Export Express Program needs to have a division. 350,000 has a 
90 percent guarantee, and the full 500,000 is a 75 percent 
guarantee.
    I do not really understand why that is necessary. The 
banker in me says, well, is it 90 or is it 75? Just make it a 
full 90 up to 500,000. Also, the 5 million that we have, it 
would be nice if somewhere along the line we could raise that.
    Ms. VELAZQUEZ. But you do not think that by raising it it 
will put a burden on those small exporters that really would 
not need the $5 million or larger, because for the banks it is 
more profitable to make a $5 or $7 million rather----
    Ms. CORSINI. Oh, understood. Understood. I have been there. 
But what I am saying is if the smaller one was structured in a 
way that perhaps was a little bit more acceptable to the 
lenders, that lower end would be taken care of. That is the 
level that you are concerned about. And then that would also 
raise the amount that the commercial lenders could deal with if 
it was just a little bit higher. I am not saying a lot. Just a 
little bit, you know, maybe from $5 to $7 or somewhere down the 
line maybe $5 to $10 at maximum. But at least a little bit. 
That lower end is not really being served.
    Now, SBA for the past 3 Fiscal Years has----
    Ms. VELAZQUEZ. The same is true with 7(a)?
    Ms. CORSINI. Mm-hmm.
    Ms. VELAZQUEZ. The biggest gap that we have today is the 
smaller.
    Ms. CORSINI. Is the lower end.
    Ms. VELAZQUEZ. Is the smaller loans.
    Ms. CORSINI. That is right.
    Ms. VELAZQUEZ. When a bank makes a $5 million, they do not 
need a guarantee because that borrower does not represent 
risk----
    Ms. CORSINI. Right.
    Ms. VELAZQUEZ.--if you qualify to get $5 million.
    Ms. CORSINI. Well, the ones we see, of course, have 
accounts receivable that are foreign, so that is the key for 
the American lending institutions. They are not comfortable 
with foreign receivables. So, yes, they need the guarantee in 
order to internally get that approval that they need. SBA has 
had loans of $150,000 for the past 3 years that have been free 
of any fees to the lenders and to the borrowers. And there was 
a definite spike in that regard upward, upward, you know?
    Again, my concern has always been that we cannot really 
strategize for the lenders. We cannot go in and dictate their 
strategy. So anything that either we can do or----
    Ms. VELAZQUEZ. But do you not think that SBA has leverage 
when we provide 90 percent----
    Ms. CORSINI. I think Congress has leverage.
    Ms. VELAZQUEZ. This is not a legislative fix. This is using 
the power that you have, the leverage that you have when such a 
big volume of those loans, we provide the guarantee. That 90 
percent should be a leverage for you to compel those same banks 
to make those smaller loans.
    Ms. CORSINI. Again, I spent many years in banking, so----
    Ms. VELAZQUEZ. I am a member of the Financial Services 
Committee----
    Ms. CORSINI. Right.
    Ms. VELAZQUEZ.--so, I, too, spend a lot of time with the 
banking sector.
    Ms. CORSINI. If you could, you could possibly push them a 
little bit to open up their strategy and be more receptive to 
our programs, and be able to put them on their books. Their 
internal strategy is given to what the return is to 
shareholders, so we all know that. Unfortunately, the small 
businesses are caught in the middle of that.
    So, yes, we do this every day, you know, day in and day out 
trying to push the lenders and advance our programs. But in the 
end, the banking is a business for themselves, too, so it is 
unfortunate.
    Ms. VELAZQUEZ. Let me ask you. In terms of geography----
    Ms. CORSINI. Yes.
    Ms. VELAZQUEZ.--and the amount of loans, you know, the 
volume of loans, is that spread out throughout the nation, or 
do you see a higher concentration in metropolitan areas?
    Ms. CORSINI. Well, for the loans, if we are talking about 
export loans----
    Ms. VELAZQUEZ. Yes.
    Ms. CORSINI.--my colleagues that are in other geographic 
areas where there is more manufacturing, obviously it is tipped 
a little bit heavier there than it would be here. You have 
small light industry in Queens. You have light industry in 
Brooklyn. Those areas would be serviced. But as far as, say, 
the larger ones, and even in northern Jersey there are 
manufacturers there where I have in my portfolio, the $4.5 
million export working capital line of credit and things of 
that nature.
    Here in the metropolitan area, it is a little bit different 
because you have these little niche industries or these little 
niche companies, if you will. I have had several of those in 
Long Island. I had one in West Chester. It was a small company, 
husband and wife, only with a few employees, and they got a 
large contract. It took them 9 months to get a bank that would 
approve them using our export working capital deal, and I 
worked closely with them. You can have a baby in 9 months, you 
know? So that is the challenge.
    Chairman CHABOT. Thank you. The gentlelady's time has 
expired. I have had enough if you have all have unless you want 
some more, another go-round?
    [Laughter.]
    Ms. CORSINI. Was it really that bad?
    Chairman CHABOT. I do not mean that in a bad way.
    [Laughter.]
    I just mean I have run out of questions. You answered all 
my questions.
    Ms. VELAZQUEZ. Mr. Castano, how long have you been in the 
SBDC?
    Mr. CASTANO. I have been in it for 3 years with the SBDC.
    Ms. VELAZQUEZ. How long?
    Mr. CASTANO. 3 years.
    Ms. VELAZQUEZ. 3 years.
    Mr. CASTANO. Yes.
    Ms. VELAZQUEZ. We opened that SBDC in 1996 when President 
Clinton was in office, but it did not start out there. It 
started at Boricua College in Williamsburg. I am so glad. We 
are all very pleased with the work that you are doing.
    Mr. CASTANO. Thank you so much.
    Ms. VELAZQUEZ. Yes.
    Chairman CHABOT. Thank you. Well, we appreciate the panel's 
testimony here this afternoon. We will take back to our 
colleagues in Washington on our Committee and beyond that what 
we have learned here today, and follow up on this. Thank you 
very much for sharing it with us.
    Trade is absolutely critical to the American economy, and 
that is one of the things we have tried to address this 
afternoon. We want to thank Ms. Meng for welcoming us to her 
district here today, and look forward to working with you in a 
bipartisan manner as we continue in the Congress.
    If there is no further business to come before the 
Committee, we are adjourned. Thank you very much.
    Ms. CORSINI. Thank you.
    Mr. CASTANO. Thank you.
    [Whereupon, at 3:08 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

    Public Hearing

    Overcoming Challenges to Exporting for Small Businesses

    I am Andres Pascual Castano, Business Advisor for the New 
York Small Business Development Center (NYSBDC) located at City 
College of Technology in Brooklyn. We are a non for profit 
organization funded mainly by the Small Business Administration 
(SBA), the New York State and New York City College of 
Technology and part of an extensive network of centers all 
around the US following the same model. Thanks to our partners 
in the public and private sectors, our services are free of 
charge.

    Through a network of 24 regional centers, the New York 
Small Business Development Center (NYSBDC) provides customized 
solutions through advisement, education, research and advocacy 
for Entrepreneurs, Innovators and the Small & Medium Enterprise 
community. We bring world class business expertise to the SME 
community.

    Since 1984, we have worked with 414,998 businesses, helping 
them to invest $5,703,510,148 in New York's economy and create 
or save 183,637 jobs.

    We are the ``Go to ``Network!

    The SBDC emphasizes our services to women, veterans, people 
with special needs, and minority clients.

    We work closely with other economic development agencies, 
faculty and students at host institutions, and representatives 
from private industry and business to focus resources on 
assisting small businesses and entrepreneurs.

    Key areas of focus with our particular SBDC are: MWBE 
certification and mentoring once certification has been 
achieved, International Trade basic assistance, Veteran 
Entrepreneurship and New American empowerment as is evidenced 
by our Organization of Latino entrepreneurs (OLE). As needs 
arrive in the communities, stakeholders come to us in order to 
facilitate solutions in the Business Community: ``911'', 
``Hurricane Irene'', ``Hurricane Sandy'' are but a few.

    We also offer assistance with issues related to:

    Technology & innovation, selling to the government, 
Regulatory compliance, and Disaster Recovery.

    On a daily basis, most of our clients come in asking for 
Grants, or loans for their respective projects. It is vital 
that we as advisors gently probe with qualifying questions to 
determine what is at the root of their concepts, business, or 
reason that they THINK they need money. We at the SBDC do not 
lend money but rather help our clients understand what they 
truly need to be successful in their start up or to improve 
upon the course of action they are currently on.

    The ideal outcome is to get each client to see their 
market, customer base, process and organization for what it is 
and what it should be. We help to increase business 
intelligence whether that involves, financial planning, 
marketing, sourcing or HR issues. Once a fair diagnosis is made 
of any one of these areas may become prioritized and a course 
of action is agreed upon.

    Central to how we do our jobs is to be a mentor for 
``life'', (or as long as the client feels necessary)

    In relation to exporting as it is a truly important 
component for the expansion and job creation is our economy and 
95% of costumers are located beyond U.S. borders. When clients 
reach to us for export assistance, they usually come as 
accidental exporters without the necessary knowledge to take 
over big and continues orders from overseas. We at SBDC help 
our clients understand and demystify the exporting process. We 
provide the tools for them to assess their export readiness and 
set a plan of action. We educate them on how to create an 
exporting plan that includes market research, market entry, 
legal aspects, compliance, transportation, finance and cultural 
aspects of the process.

    If businesses are doing as well as possible, SBDCs may not 
be required. However.... if improvement can be made in a 
business...the SBDC is ``The GO TO Network''!

    If you want more information or want to have access to our 
services, you can reach SBDC by visiting our website http://
www.nyssbdc.org/, calling our office at 718 707 0187 or email 
at [email protected].

    Pascual Castano
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
   
    Chairman Chabot, Ranking Member Velazquez, Committee 
Ranking Member Meng, and other Distinguished Members of the 
Subcommittee, it is a pleasure to testify before you today on 
SBA's International Trade program. My name is Toni Corsini, and 
I work as the Export Finance Manager for SBA covering the five 
boroughs of New York City, Long Island, Westchester, Mid- 
Hudson and Eastern Upstate NY, and the State of New Jersey for 
SBA's export financing programs.

    As you know, the opportunities for small business exports 
continue to grow, with small businesses now accounting for 
nearly 34% of all U.S. export dollars, up from 29% in FY 2006. 
But while opportunities exist, the sale will never take place 
if a company lacks the capital to be able to fund the 
transaction. So, while the SBA is more broadly involved in 
ensuring that small businesses have the information and 
training they need to get export ready and in ensuring that 
firms have access to market opportunities by making sure that 
critical rules are included in trade agreements, my division 
works primarily to ensure that companies have the capital they 
need to develop new markets and to compete successfully in 
those markets.

    In terms of connecting small exporters with new markets, 
we've seen great progress through the State Trade and Export 
Promotion program, through which SBA provides competitive 
grants to states to support their small business exporters. I'm 
pleased that both New York and New Jersey took advantage of 
this grant program last year and currently are operating with 
grants of $664,000 for New York and $498,000 for New Jersey. 
Both states help support companies attending overseas trade 
shows, for example, where they can meet new prospective agents 
and distributors.

    With regards to financing, SBA has three targeted loan 
programs that can take a small business from early-stage 
exporter to one that needs to expand due to export success. 
Very briefly, I would like to describe the three loan programs.

    As you know, Congress made the Export Express program 
permanent in the Small Business Jobs Act of 2010, with a 90% 
guaranty to lenders up to $350,000 and a 75% guaranty on loans 
up to $500,000. Proceeds can be used to fund any export 
development activity, including attending foreign trade shows, 
translating literature, product modifications, etc., as well as 
financing early transactions and for equipment and real estate 
used in the production of goods and services for export. This 
is a delegated lender program, meaning that SBA provides 
expedited approval for such loans, typically within 36 hours.

    Secondly, the Export Working Capital program provides a 90% 
guaranty on loans up to $5 million which can finance the entire 
export transaction cycle, from purchase order to collections. 
These are loans that my office help structure and underwrite, 
working directly with lenders throughout my territory.

    Thirdly, if a company becomes successful and needs to 
expand its plan and equipment as a result of increasing export 
sales, SBA can provide a 90% guaranty on an International Trade 
Loan, a term loan that can fund permanent working capital up to 
10 years and real estate up to 25 years, to ensure that the 
company can expand and remain competitive in global markets.

    Although any SBA loan can support an exporter, we feel 
these three targeted loan products have been very successful in 
being able to take a small business from the early stages of 
developing foreign markets to helping them expand due to export 
success.

    In FY 2015, SBA approved 1,777 loans to exporters for 
$1.454 billion; of those, 547 loans were one of the three core 
loans mentioned above for $730 million. Both categories of 
loans were records for SBA, even during a year when overall 
U.S. exports decreased 4.8%. In my territory, 96 loans were 
made to small business exporters totaling $67 million, which 
are estimated to have supported over $100 million in export 
sales.

    Thank you again for the opportunity to speak with you today 
about SBA's export finance programs. I would be happy to take 
any questions.

                                 [all]
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