New York state wants to get more small and medium-sized businesses excited about exporting, and figures a $35 million targeted fund is a good way to grab their attention.
The newly launched Global NY Fund offers loans and grants for companies to either start exporting or expand on international trade. The fund will make available $5 million a year for each of the next seven years, said Erin Cole, senior vice president for Global NY, which is part of Empire State Development.
“We haven’t had that kind of money for export assistance in many years,” Cole told an audience of about 70 people in Amherst on Tuesday. “We have money on the table, and the key thing is we need you take advantage of it.”
By working with lenders, the Global NY Fund is making available loans of up to $500,000 for companies to buy equipment and inventory to fulfill export-related contracts, and to provide working capital for foreign accounts. The program is also making available interest-free loans of up to $50,000 for distilled and fermented beverage companies, to promote that industry internationally.
The fund also will provide grants of up to $25,000 to help companies either start or enhance their exporting. Businesses might use those grants to cover costs like participating in trade shows in other countries, or to customize a product for a foreign market. Nonprofit groups that provide export assistance and trade education to New York state companies can apply for grants of up to $50,000.
The program has some eligibility requirements. For instance, for-profit companies that want to participate must have 500 or fewer employees in New York state. And companies have to be spend some of their own money to obtain a grant: for example, in order to be approved for a $10,000 grant, a company would have to document how it would spend a total of $20,000 on export-related costs, and get reimbursed for half of that amount.
Cole said companies interested in exporting need to be “export-ready” before they can apply for a grant or loan through the program, and Global NY can work with companies to help them reach that point. Understanding the cost of exporting is critical, she said.
“I’ve worked with many companies across the state who had an awesome product and they wanted to start exporting, but they didn’t understand what is the duty rate in a foreign country, what is the tax, insurance and transportation costs,” she said. But if a company researches all of that, it can get a handle on how soon it can expect to turn a profit on its exports.
A well-thought out exporting plan makes sound business sense, she said. “You diversify your sales, which means you diversify your risk.”
Cole, who lives in Lockport, is promoting her message about the Global NY Fund around the state. Amherst was the ninth stop on her tour.
Cole said she thinks once companies get more educated about exporting and address basic concerns, more of them will participate.
“U.S. companies and New York state companies included, the vast majority of them do not export, for any number of different reasons,” she said.
But once companies get up to speed, they can explore which foreign markets are most suitable for their products. Then they can take steps like getting a foreign distributor or attending a trade show to drum up more business, she said.
The program officially launched April 1. Cole said the program is attracting interest from companies ranging from manufacturers to food producers to beverage makers.