U.S. Export-Import Bank continues to dispense aid for cashing in on global sales

Nov. 9, 2017
Despite several politically induced senior-level oversight vacancies, the Export-Import Bank of the United States is still open for business to assist aftermarket executives with selling products to overseas customers.

Despite several politically induced senior-level oversight vacancies, the Export-Import Bank of the United States (Ex-Im) is still open for business and eager to assist aftermarket executives seeking assistance for selling products to overseas customers.

The independent, self-sustaining quasi-governmental agency is beset by controversy as conservatives and liberals alike have denounced it as a bastion of “cronyism” and “corporate welfare.” President Donald Trump’s slate of five nominees to fill empty Board of Directors seats has yet to receive confirmation hearings, and critics questioned whether his rejected selection to become chairman and president, former Republican Rep. Scott Garrett of New Jersey, was intent on implementing reforms or totally eliminating the program. Two Republicans joined Democrats in turning down Garrett's nomination by a 13-10 margin in a December vote of the U.S. Senate Banking Committee.

In the meantime, Ex-Im’s career-oriented management and staff are still reporting to work each day and operations are ongoing, according to spokeswoman Linda Formella.

“We’re certainly trying to reach out to more customers,” she says, declining to discuss the political brouhaha with Aftermarket Business World while asserting that Ex-Im’s current Congressional authorization remains valid until at least 2019.

Ex-Im “serves the people of the United States by helping American businesses grow through selling their products to other countries,” says Acting Chairman and President Charles J. Hall, a veteran of the nation’s diplomatic corps. “We are proud of our role as a mechanism for job creation and economic prosperity.”

Individual states are continuing to join the Regional Export Promotion Program (REPP) launched in 2016 with a roster of nearly 40 economic development organizations in more than 35 states and two U.S. territories.

“Since 2009, Ex-Im has demonstrated a historic commitment to small business exports, and our local partners were key contributors to that success,” says Formella. “Through REPP, the Bank will continue to grow our network of regional, state and local partnerships we need to ensure small businesses have additional tools and access to U.S. government resources for exporters.”

Benefits of the program for executives, especially owners of small businesses, include assistance with outreach and counseling; introduction to marketing and training materials; and access to qualified finance experts, lenders, insurance brokers and other sources of support.

“I’ve seen first-hand how Ex-Im programs really help small businesses grow their international sales, create jobs and improve Alabama’s economy,” says Bill Cummins, executive director of the Alabama Small Business Development Center Network (ASBDC). In association with the University of Alabama, ASBDC “has a 35-year history of working with Ex-Im Bank programs, and we look forward to growing that relationship with the Regional Export Promotion Program.”

Showing no signs of a slowdown, in September Ex-Im announced that it was extending the compliance timeframes for program participants in all the areas hit by hurricanes this year. “Small businesses often have difficulty resuming operations, and these customers have a lot more on their minds than their export finance obligations,” Hall says. “We’re here to help them get back up and running as soon as possible by providing them with flexibility on deadlines relating to the use of our products.”

“It’s being considered on a case-by-case basis,” Formella adds. “It’s giving them some time to meet the requirements under the programs. Existing customers should check with their regional office to see what the situation is.”

Ex-Im’s overall mission includes “filling gaps in private export financing at no cost to American taxpayers. The Bank provides a variety of financing mechanisms – including working capital guarantees and export credit insurance – to promote the sale of U.S. goods and services abroad,” she explains.

The working capital provision provides funds for developing your export marketing efforts, and the insurance policy assures that you’ll be paid for whatever you sell if your overseas buyer defaults on the deal.

New in 2017 is the April rollout of the Ex-Im Alliance Program directed at eligible organizations such as national and regional trade associations, industry groups, media groups and think tanks.

“Through the Alliance Program, Ex-Im Bank will continue to educate and grow our network of key industry stakeholders,” says Hall. “We want to ensure U.S. exporters have additional tools and access to U.S. government resources needed to compete globally.”

Alliance members can participate in assorted Ex-Im events, roundtable discussions, webinars and training sessions. Additionally, members have ready access to the agency’s regional directors and are “uniquely positioned to benefit from networking opportunities,” according to Hall.

Among the details:

  • Education and Training: Ex-Im will provide education and training, leveraging a range of resources such as articles and blogs, Ex-Im eBooks and Videos, peer-to peer-communication, and trade finance-focused webinars.
  • Export Assistance: Ex-Im will provide exporter assistance through a number of consultations hosted by regional directors located in 13 finance centers throughout the U.S. The external affairs team will coordinate with regional directors to host training sessions in person (or via webinar) and provide counseling on Ex-Im products and trade finance opportunities.
  • Marketing and Digital Engagement: Ex-Im will engage with Alliance members and provide exporter-related information through tailored banner advertisements, branded emails, social media posts and marketing collateral.

“Our team will create content which focuses on issues that resonate with an organization’s membership, or highlight an initiative within the organization that has broad appeal,” says Formella. “Content can be used in informational and marketing collateral, blogs on the organization’s website, emailed to the organization’s members or placed in online newsletters. Additionally, Ex-Im can share the content with customers on our subscription lists and promote them on Ex-Im Bank social media.”

Soaring sales

The U.S. Chamber of Commerce is an avid advocate of Ex-Im. A 2014 analysis from the Chamber’s Dennis Sawyers, fellow of international policy, cites several industry businesses that have benefited through Ex-Im programs, including the A.J Rose Manufacturing Co. in Avon, Ohio.

“Normally, commercial banks will not extend loans to cover a small company’s overseas orders, but Ex-Im guarantees allow them to do just that. With Ex-Im guarantees, A.J. Rose exported an additional $2.7 million in engine parts and hired 19 people,” according to Sawyers.

Abro Industries of South Bend, Ind. markets numerous automotive materials – such as service fluids, additives, lubricants, paints, cleaners, films and appearance products – and it too obtained heightened revenues through Ex-Im assistance, says Sawyers in his synopsis: “Abro began by purchasing credit insurance in 2003 for its African business. Sales to Africa more than doubled to more than $20 million in just a few years. This opened the way for an Ex-Im working capital loan in 2009, and sales soared.”

“Ex-Im is especially important to U.S. small- and medium-sized businesses, which have long accounted for nearly 90 percent of Ex-Im’s transactions. In addition to these direct beneficiaries, tens of thousands of smaller companies that supply goods and services to large exporters also benefit from Ex-Im’s activities,” reports Neil Bradley, the Chamber’s senior vice president and chief policy officer.

“Some critics charge that Ex-Im picks winners and losers, skewing the marketplace. On the contrary, Ex-Im extends loans and guarantees to all applicants that meet its strict lending requirements but does so only when commercial credit is unavailable or when it is necessary to counteract below-market credit from foreign ECAs (export credit agencies),” he says.

“Far from being a subsidy for corporations,” says Bradley, “Ex-Im charges fees for its services that have generated $7 billion in revenue for the U.S. Treasury over the past 20 years above and beyond federally appropriated funds for the Bank’s operations.”

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