ICYMI: Small Businesses Are Shocked By Congress’s Refusal To Act On Ex-Im Before Going On Recess
Small businesses that rely on the Export-Import Bank are shocked that Congress decided to leave for summer break before voting to reauthorize the agency’s charter. Now, they will have to face another month of uncertainty while foreign trade competitors move forward aggressively in the international market.
Gary Mendell, president of export insurance firm Meridian Financial Group, sums up the situation perfectly, saying, “Those foreign competitors are going to customers in other countries and saying, ‘Hey, you don’t know if your U.S. supplier is even going to be able to ship to you and give you the payment terms they’re promising in their quote, because look what’s happening with Ex-Im Bank.’”
See below for more quotes from small business leaders on the frustration and uncertainty caused by Congressional inaction.
Texas Small Business Owner: “We’re Really Frustrated” With Congress. “‘We’re really frustrated,’ said Tyler Schroeder, a financial analyst at the 265-employee company Air Tractor, which makes firefighting and agricultural aircraft and is based in the 3,000-person town of Olney, Texas. ‘We’re at a loss how Congress can literally go on vacation and just say, ‘Good luck, guys.”” (Victoria Guida, “Businesses Fume As Congress Lets Export-Import https://exportersforexim.org/files/2015/07/bank stay dead,” POLITICO, 7/30/15)
Schroeder: We Don’t Know “How We’re Going To Fill The Gap.” “Similarly, Schroeder’s Texas crop-dusting manufacturer could lose up to one-fourth of its sales after losing the bank’s credit insurance, he said Wednesday. ‘We’re scrambling now, trying to find a way to facilitate our sales throughout the rest of this year,’ he said…Schroeder added: ‘We can only do this for so long…When it comes to next year’s export season, we don’t know. We don’t have an answer for how we’re going to fill the gap that’s been left by Congress’ blatant disrespect for business, in my opinion.’” (Victoria Guida, “Businesses Fume As Congress Lets Export-Import https://exportersforexim.org/files/2015/07/bank stay dead,” POLITICO, 7/30/15)
Trade Financier Says Ex-Im Demise Has Made Foreign Competitors “Gleeful.” “Gary Mendell, president of trade financier Meridian Finance Group, said export credit agencies in other countries are already taking advantage of Ex-Im’s expiration to lure away business from U.S. companies. ‘They’re gleeful about it, and I don’t blame them,’ Mendell said. ‘Those foreign competitors are going to customers in other countries and saying, ‘Hey, you don’t know if your U.S. supplier is even going to be able to ship to you and give you the payment terms they’re promising in their quote, because look what’s happening with Ex-Im Bank.”” (Victoria Guida, “Businesses Fume As Congress Lets Export-Import https://exportersforexim.org/files/2015/07/bank stay dead,” POLITICO, 7/30/15)
Mendell: Many Of My “Clients Are Having To Cut Back Sales” Due To Loss Of Ex-Im Bank. “‘We don’t have any alternative in the private sector to bring them to,’ said Mendell, whose company provides export credit insurance for around 1,000 companies, of which 550 have insurance policies through Ex-Im…The insurance allows the U.S. exporter to give the foreign buyer payment terms, so it can take 30, 60 or 90 days to pay for the shipment. But if the exporter is selling something like medical equipment that will take 90 days to manufacture, Mendell said, then the insurance wouldn’t be available when it’s ready to ship. ‘If you’ve got customers for Christmas season, you’re shipping in September/October,’ he said, so many of his clients are having to cut back sales.” (Victoria Guida, “Businesses Fume As Congress Lets Export-Import https://exportersforexim.org/files/2015/07/bank stay dead,” POLITICO, 7/30/15)
Oil Equipment Exporter Says That Without Ex-Im, It Will Lose 30-40 Percent Of Sales “Right Off The Bat.” “But Rami Touma, president of Houston-based oil equipment exporter CECA Supply & Services, said Ex-Im’s services are critical to his business’s ability to sell products to Algeria, its major source of income…’We do not have the ability to just not have $6 million accessible to us,’ Touma said. ‘So Ex-Im, they put the money in for us, and we pay a fee’…For smaller companies, ‘in any given year, our projects in North Africa represent 30 to 50 percent of their yearly sales,’ he said. His policy with Ex-Im is locked in for roughly the next year, but if the agency stays dead, CECA would lose 30 to 40 percent of its sales ‘right off the bat.’”(Victoria Guida, “Businesses Fume As Congress Lets Export-Import https://exportersforexim.org/files/2015/07/bank stay dead,” POLITICO, 7/30/15)
BCH Trading CEO: Ex-Im Bank “Is Absolutely Vital To Our Existence.” “Randy Barsalou, who owns BCH Trading Co. in Hot Springs, Ark., said he was in ‘disbelief’ that Congress was leaving for summer break without a reauthorization vote. ‘We use the program daily in tandem with our commercial bank, and it is absolutely vital to our existence given that 100% of our sales are exports,’ he said.” (Jim Puzzanghera and Lisa Mascaro, “Export-Import https://exportersforexim.org/files/2015/07/bank is dealt a blow as it is excluded from highway bill,” Los Angeles Times, 7/29/15)
GE Plant Manager: A Permanent Ex-Im Demise Will Jeopardize “Good Manufacturing Jobs.” “My plant has 70 employees. Last year, Ex-Im financed more than $720 million in locomotive orders from GE’s U.S. factories to railroads in South Africa, Indonesia and Australia. These Ex-Im financed sales help drive GE’s continued investment in our North Las Vegas plant, which services the Western U.S. rail network. If exports drop because of a lack of Ex-Im financing, our U.S. customer railroads will see their traffic go down, too. That will mean fewer wheel and traction motors for our plant to rebuild — jeopardizing good manufacturing jobs that our local economy can’t afford to lose.” (Mehul Mehta, “Nevada’s Congressional Delegation Must Support Ex-Im Bank,” Las Vegas Review-Journal, 7/29/15)
California Small Businessman “Begged” For Ex-Im Renewal. “They complain that Boeing and other big companies, which receive the largest share of the total funds, use small exporters simply to provide a more sympathetic front. ‘Nobody uses me,’ countered Steven Wilburn, chief executive of FirmGreen Inc., a renewable energy company based in Newport Beach, Calif., with 11 employees. He said he, not Boeing, paid for his three trips to Washington to try to persuade Republicans to support the bank. ‘I’ve begged them,’ Mr. Wilburn said. ”If you have alternative sources of financing, please put them through to my doorstep.”” (Jackie Calmes, “Outlook For The Ex-Im Bank Dims As Congress Departs,” The New York Times, 7/29/15)