SMALL BUSINESS IS ESSENTIAL TO INTERNATIONAL ASSISTANCE

International assistance is not charity; it is a strategic investment in U.S. economic strength. 

These investments provide both economic and national security rewards and improve our standing throughout the world. They create jobs, bolster local economies in communities across our country, help ensure stable global trading partnerships, and open new markets for U.S. business. In addition, there are robust systems in place to ensure that funds are properly allocated and spent, in compliance with all laws, helping to provide a high return in taxpayer investment.  

Small businesses are the economic driver behind international assistance. 

This dynamic community of highly reliable, innovative, nimble, and technically expert service providers are essential to ensuring international assistance programs make America safer, stronger, and more prosperous.

• These small businesses are located in Congressional districts throughout the country; SBAIC members alone represent 41 states.
• Small businesses working on international assistance are for-profit organizations delivering services  for which they are being paid; they are not borrowing money from the government to give it away to other countries. These are services that the U.S. government defines and procures, primarily through highly competitive contracts.
• Small businesses tend to be highly cost-effective, enabling government dollars to go farther. They are critical to avoiding wasteful and ineffective spending, delivering results on time and on budget without compromising quality.
• By exporting their uniquely American entrepreneurism, small organizations are creating new businesses and stable economies overseas. They have a unique ability to strengthen local capacity in the communities in which they work, helping to ensure solutions are sustainable. 
• These firms are nimble and operate with a combination of seasoned oversight, agility, and innovation. SBAIC members are prime contractors on 80 percent of the work they implement. With contracts ranging from $100,000 to $42 million, many of these contracts are equivalent in size and complexity to those held by far larger entities. 

• With few, if any, layers of hierarchy, small business leadership is readily accessible, responsive, and able to make decisions at a moment’s notice. This swift access and decision-making is praised and appreciated by U.S. government clients.
• Many small businesses are highly specialized. Their teams include some of the top experts in their fields and help drive innovation in key areas.

The Trump Administration’s  foreign aid funding freeze and subsequent cancellation of contracts has created catastrophic financial upheaval for small businesses, leaving many on the brink of disaster. 

“Our business is decimated. We are a small veteran-owned business and will be out of business by the end of the month.” – Pennsylvania small business owner

The thousands of USAID contracts that the Trump Administration has cancelled have disproportionately impacted small businesses. Many are now facing catastrophic circumstances, losing their entire portfolios and laying off most or all of staff. These are not “beltway bandits;” these actions have impacted companies in at least 43 states.

Small businesses operate with very low margins and limited access to financing. By freezing foreign aid funding and cancelling contracts with no advance warning, the Trump Administration has pushed these companies to the breaking point and beyond. 

Historically, small businesses have used USAID invoices as collateral for credit. In the government contracting space, these invoices have long been considered by banks to be as good as cash. As the uncertainty around international assistance continues, many banks are now walking away. As a result, small businesses are unable to secure the loans or lines of credit they rely on to cover the upfront costs associated with government contracts.

“My company is currently owed nearly $250,000. We have had to terminate both of our contracts in Tanzania and Zimbabwe, laying off 9 and 12 staff, respectively. The three of us based in the US have also furloughed ourselves. The home office staff hasn’t received a full paycheck since December, and now we don’t have enough money to pay our international staff and fulfill our contractual obligations with them.” – Minnesota small business owner

99.9% of all U.S. businesses are small businesses. We can’t talk about making America great without ensuring small businesses thrive. Here is how we can do that:

1. Qualified staff must be in place to ensure that there is an effective procurement process going forward.

The gutting of USAID and broader staff reductions undertaken by the Trump Administration have left core roles empty and significantly diminished capacity. The Contracting Officers (COs) and Agreement Officers (AOs) — who have the unique ability to manage contract funding flows — have been let go and, with them, essential intellectual capital and expertise. Not only does the Administration currently lack the capacity to implement its vision for the future of international development, it also will be unable to ensure the stability of the remaining  programs that are currently in progress. Without the necessary expertise, it will not even be able to maintain functions critical to international development.

2. The stop work orders and contract cancellations that have impacted the efforts of small businesses working on international assistance must be rescinded.

This work is essential to making America safer, stronger, and more prosperous. From stopping disease outbreaks before they reach our shores to countering instability and strengthening fragile states, small U.S. firms are doing the work that protects American lives and economic interests. Yet, the top 15 awardees of international development work under the Trump Administration at this current moment are all large implementers.

To be as effective as possible, U.S. international assistance programs must partner with nimble, innovative American small businesses, not just major organizations. There is a role for all of us. This approach bolsters our global leadership and national security, while supporting good-paying jobs in communities across the country. 

3. Small businesses must be included in any conversations around the future of U.S. international assistance. 

These firms are front-line implementers and innovators; their on-the-ground insight and operational experience are critical to designing practical, effective, and accountable development strategies. The years small businesses have spent building strong partnerships with local communities offer valuable lessons that should be central to any next-generation U.S. development policy.