President Obama has noted that “small businesses are the backbone of our economy and the cornerstones of our Nation’s promise.” The same is true throughout the Western Hemisphere, where the small business sector plays a critical role in job creation and broad-based economic growth.
Announced today in Tampa, the Small Business Network of the Americas (SBNA) will promote and support job creation in small and medium-sized enterprises (SMEs) and encourage greater trade among these businesses throughout the Western Hemisphere. The SBNA will expand the pool of available resources for business development, enhance access to business counseling services for entrepreneurs, and foster SME growth by providing a framework to connect businesses across the hemisphere.
To achieve these goals, SBNA will promote progress and strengthen networks by:
- Expanding the successful Small Business Development Center (SBDC) model to other countries in the hemisphere: SBDCs provide individualized, long-term business counseling, group training, and market research services. The United States currently has nearly 1,000 SBDC service locations throughout the country. Other examples include the Mexican Association of SBDCs, which has 104 SBDCs serving 32,000 businesses annually throughout Mexico. El Salvador also has 10 SBDCs operating to-date, planning 4 more to cover each state, and an international trade specialty SBDC this year.
- Connecting the more than 2,000 SBDCs and similar SME support centers throughout the hemisphere: These centers already serve approximately two million small business clients, and we will continue to work to encourage new trading partners to join this network. SBDCs helped created nearly 20,000 jobs in the United States in FY 2011.
- Providing matchmaking services and export counseling through U.S. Export Assistance Centers (USEACs) and other platforms to SBDC clients seeking business partners in other countries. Through ongoing referrals, SBDCs connect export-ready SME clients with the USEACs to receive in-depth export counseling and leverage the Department of Commerce’s Domestic and Foreign Commerce Service network of export and industry specialists located in more than 100 U.S. cities and 70 countries worldwide to provide counseling and assist small business export their products and services.
- Enhancing the use and availability of virtual trade platforms like SBDCglobal.com: These platforms help SBDCs expand their international relationships, allowing SME clients to access information on buyers and sellers in other countries.
The President also pledged to encourage diaspora entrepreneurship in the United States by:
- Leveraging the dynamism of diaspora communities through the Latino American Idea Partnership (La IdEA) and the Caribbean Idea Marketplace (CIM) business competition platforms: These competitions will award grants to the most transformative ideas for business and investment and promote the development of business relationships among entrepreneurs in the United States, Latin America, and the Caribbean.
- Providing working capital grants in association with La IdEA and CIM partners to competition winners and up to $150 million in financing through the Overseas Private Investment Corporation for eligible applicants: These grants will allow diaspora entrepreneurs to bring their international business plans to fruition.
Finally, the President reiterated his commitment to expanding available financing resources for SMEs by:
- Providing up to $100 million in loan guarantees to encourage financial institutions in the region to increase lending to SBDC clients and other SMEs: These loan guarantees will allow SMEs in Latin America and the Caribbean access to finance that is critical to expanded growth and job creation.
- Catalyzing greater private sector lending to SMEs to address the estimated $160-190 billion credit gap these businesses face in Latin America and the Caribbean: The U.S. government will work to promote secured lending in the region, as well as partnerships with governments to provide co-guarantees to lenders serving the SME sector, as part of an effort to secure increased access to capital for SMEs.