“Our bottom line is American jobs, but we also know that the bottom line for your small businesses is sales,” Export-Import Bank President Fred Hochberg said during the event. “Our products, our experts, our entire agency, it’s all here to break down the barriers that hold you back from winning global sales.”
Hochberg’s second line isn’t disputed. Over the past 80 years, Ex-Im Bank, as it’s commonly called, has provided low-rate financing to foreign buyers of American products and services, helping U.S. businesses attract new customers and break into new markets overseas. Ex-Im Bank also provides trade credit insurance to U.S. firms to cover losses if the company fails to collect payments from foreign customers, easing one of the most oft cited concerns of would-be exporters.
What is disputed is whether those efforts mostly support small or large businesses.
Critics in Congress – and there are many – have cast the agency as a prime example of corporate welfare, pointing out that more than 80 percent of the agency’s funds are spent backing purchases from large corporations like Boeing, GE and Caterpillar. Consequently, many (particularly Republicans) have said they will vote against legislation that would reauthorize the agency when Ex-Im’s current lifeline expires in June.
But there’s another way to slice the numbers.
Ex-Im officials and their supporters on Capitol Hill note that nearly 90 percent of the total number of transactions made by the agency support exports by small businesses. Naturally, those transactions are smaller than the ones involving Boeing’s airliners and Caterpillar’s bulldozers, which they argue distorts the dollar-figure variation. Breaking the numbers down by transaction, supporters say, more accurately illustrates the level of support provided to small businesses.
It will likely be much easier to drum up support for saving an agency that’s perceived as backing the little guys, not one that relies on taxpayers’ money to grease the exporting wheels for multinational corporations.
Debating which pie chart to use doesn’t tend to sway public opinion as much as actual stories about actual businesses, though – and that’s why events like Monday’s may play a big role in determining the fate of the agency.
During the event – which was put on by the Export-Import Bank and one of its staunch supporters in Congress, Rep. Gerald Connolly (D-Va.) – Hochberg shared the stories of small companies across the country that have benefited from his agency’s services. He talked about Jenny Fulton and her small pickle business in North Carolina, which took advantage of Ex-Im’s credit insurance to guarantee a portion of her overseas sales and allow her business to take orders on credit.
“Jenny told us that when she let one of her overseas buyers know she had export credit insurance from Ex-Im, they doubled their order,” Hochberg said during the event, which was part of an ongoing series of Global Access Forums meant to educate small businesses about Ex-Im’s resources. The agency has been holding the events periodically for the past four years. “Today, pickle lovers from Canada to Mongolia are enjoying her product.”
He went on to describe the success of Howe Corp., an ice machine company in Chicago, and Environmental Dynamics, a small water treatment technology venture in Columbia, Mo., both of which have used the agency’s products to break into foreign markets and expand their customer bases.
“We need an international trading system that works for America, and support for Made in America exports that works for U.S. small businesses,” Rep. Connolly said during the event, adding that reauthorizing the Ex-Im Bank would be a step in the right direction.
Still, it’s more effective to show than to tell. To that aim, Connolly and Ex-Im officials brought in two local business owners to share how the bank has helped them grow their companies. Christopher Millar, chief executive at Gatekeeper Inc. in Sterling, Va., explained that his company uses working capital loans and credit insurance from the Ex-Im Bank.
“We’re now able to offer the types of facilities that our buyers often require, because they don’t want to pay you until they get paid,” said Millar, whose firm manufactures vehicle inspection and remote-access control devices that attach to the underbelly of cars and trains. He later said that those two programs have over the past five years helped his company expand from fewer than 10 workers to 25 while revenues have consistently doubled every year over that period.
Debbie Askin, whose company provides aviation safety software to regulators overseas (among other buyers), currently receives trade credit insurance through Ex-Im Bank. If Congress does not renew the agency’s charter, her Fairfax-based business, which also employs about 25 people, “would have to reexamine whether we could continue to export,” she said.
While there are other export insurance options available through the private market, she added,” they are a lot more expensive and they just don’t have the same clout the U.S. government has overseas.”