Ex-Im Bank Helps Insure Specialty Food Maker When Exporting Abroad
SB Global Foods, Inc. – Lansdale, Pennsylvania
SB Global Foods, Inc. ships Rocky Mountain Marshmallows, Caramel Popcorn and Pretzel Pete Gourmet Pretzel Nuggets from its warehouse in Lansdale, Pennsylvania, to markets all over the world. Over 80 percent of its $15 million in annual sales come from exports, and nearly all of those exports are insured by the Export-Import Bank of the United States (Ex-Im Bank).
SB Global Foods maintains a small staff of only seven people at its Pennsylvania office. However, its co-packers employ hundreds of workers at seven manufacturing facilities located in Pennsylvania, Illinois, and Indiana. The firm has been in business since 1991 and have used Ex-Im for over 15 years. “Ex-Im’s credit insurance program has been critical to our ability to extend open account terms to our customers,” says Karl Brown, President of SB Global Foods. “If we were not able to offer open account terms, our export business would be substantially less and would cripple our ability to grow.”
Indeed, small businesses like SB Global depend on Ex-Im Bank for credit insurance against large defaults by their foreign buyers. Knowing that they are insured against a default from one of their overseas customers, SB Global’s suppliers can then comfortably extend terms to SB Global. The benefits are widespread: American businesses prosper, new jobs are created, and demand for U.S. goods increases abroad.
What does Brown think of claims that Ex-Im puts taxpayers at risk? “In over 15 years of using Ex-Im credit insurance, we have only filed two claims totaling $20,000 out of about $70 million worth of export sales,” says Brown. SB Global’s case is not unusual. Ex-Im’s default rate is less than 0.25 percent; this is one reason the bank was able to return over $1 billion to the U.S. treasury in 2013 alone.
If Congress fails to reauthorize Ex-Im Bank, it will mean less money for U.S. taxpayers and less jobs for American exporters. According to Brown, SB Global Foods, Inc. would be heavily impacted. “If Ex-Im Bank is not reauthorized, it would severely inhibit our export sales and result in a dramatic drop in our business. This would also result in potential layoffs at my company as well as those co-packers who manufacture our export products.” Just as thousands of American businesses like SB Global depend on Ex-Im for their export business, thousands of American workers depend on Ex-Im for their jobs.