ACTION NEEDED: Sign Ex-Im Bank Letter Today!
Associated Industries of Missouri, the National Association of Manufacturers and the U.S. Chamber of Commerce are seeking your support for legislation to reauthorize the Export-Import Bank of the United States (Ex-Im), the charter for which will expire on September 30. We ask that you consider listing your company as a signatory of our letter to Congress. The deadline for signatures is Wednesday, June 4, 2014. You may access the full text of the letter and sign up here.
The Export-Import Bank of the United States (Ex-Im Bank or the Bank) is an independent executive agency and a wholly owned U.S. government corporation that was first organized as a District of Columbia banking corporation in 1934. For 80 years, Ex-Im Bank has served as the official export-credit agency of the United States. The Export-Import Bank Reauthorization Act of 2012 extended the Bank’s charter until September 30, 2014. Congressional action is needed by September 30 to allow the Ex-Im Bank to continue its activities. Ex-Im is that rare federal agency that is self-sustaining, operates without taxpayer dollars all while providing important support for American exporters and the workers they employ.
Ex-Im Bank’s mission is to facilitate the export of U.S. goods and services by providing competitive export financing and ensuring a level playing field for U.S. goods and services in the global marketplace. Ex-Im Bank supports U.S. exports by providing export financing through its loan, guarantee and insurance programs in cases where the private sector is unable or unwilling to provide financing or when such support is necessary to level the playing field due to financing provided by foreign governments to their exporters that compete with U.S. exporters. The Bank’s charter requires reasonable assurance of repayment for the transactions it authorizes, and the Bank closely monitors credit and other risks in its portfolio.
Ex-Im Bank has been important for Missouri exporters, especially small businesses. In 2013, 94% of Ex-Im supported transactions in Missouri were by small businesses, representing $176 million in exports. Nationally in 2013, Ex-Im supported exports that in turn sustained more than 200,000 American jobs at 3,400 companies. It is especially important to small and medium-sized businesses, which account for nearly 90 percent of the Bank’s transactions.
MORE ABOUT EX-IM BANK SERVICES FOR SMALL BUSINESSES
Overseas markets offer huge opportunities, but the playing field for U.S. companies isn’t always level. Countries such as China, France, Germany, Brazil, and Korea have their own equivalents of Ex-Im, and in recent years they have provided two to seven times the level of support for their exporters that Ex-Im has provided to U.S. exporters. If Ex-Im is not reauthorized, American companies, particularly our smallest manufacturers, would be put at a substantial disadvantage in global markets, resulting in lost sales and lost jobs.
In pursuit of its mission of supporting U.S. exports, Ex-Im Bank offers four financial products: direct loans, loan guarantees, working capital guarantees and export credit insurance.
Loans and guarantees extended under the medium-term loan program typically have repayment terms of one to seven years, while loans and guarantees extended under the long-term loan program usually have repayment terms in excess of seven years. Generally, both the medium-term and long-term loan and guarantee programs cover up to 85 percent of the U.S. contract value of shipped goods.
Under the Working Capital Guarantee Program, Ex-Im Bank provides repayment guarantees to lenders on secured, short-term working capital loans made to qualified exporters. The working capital guarantee may be approved for a single loan or a revolving line of credit. Ex-Im Bank’s working capital guarantee protects the lender from default by the exporter for 90 percent of the loan principal and interest. Ex-Im Bank’s Supply Chain Finance Guarantee Program (SCF Program) is designed to support U.S. exporters and their U.S. based suppliers, many of whom are small and medium sized companies. Under the SCF Program, lenders will purchase accounts receivable owned by the suppliers and due from the exporter. Ex-Im Bank provides a 90 percent guarantee on the repayment obligation of the exporter. The purchase of accounts receivable allows suppliers to receive immediate payment of their outstanding invoices, decreases their cost of financing, and enables them to better fulfill new orders and maintain and/or add jobs. The exporters benefit by having the option to extend payment terms without imposing undue financial hardship on their suppliers.
Ex-Im Bank’s export-credit insurance policies help U.S. exporters sell their goods overseas by protecting them against the risk of foreign-buyer or other foreign-debtor default for political or commercial reasons, allowing them to extend credit to their international customers.
EVEN MORE RESOURCES AVAILABLE FROM THE NATIONAL ASSOCIATION OF MANUFACTURERS AND THE U.S. CHAMBER OF COMMERCE
If you’d like to learn more, please see resources online here and here, or contact Lauren Airey, Director of Trade Facilitation Policy at the NAM (email@example.com) or Christopher Wenk, Senior Director for International Affairs at the U.S. Chamber (firstname.lastname@example.org).