Long-term reauthorization needed for Export-Import Bank

For more than 80 years, the U.S. Export-Import Bank has been financing the export of American goods and services, largely from small businesses. Though it has historically been an important resource for small businesses, some lawmakers are pushing to defund the bank, which could have far-reaching consequences for the small business community.

If Congress fails to reauthorize the Bank’s charter before June 30, its services to businesses will end immediately, leaving the thousands of small businesses they help each year without the resources they need to export commodities to international customers. This would be devastating to small exporters and entrepreneurs looking to grow their businesses.

{mosads}The Ex-Im Bank is important to small businesses because it gives them an edge by leveling the playing field between small firms and their larger counterparts. The bank fills in the gaps offered by traditional financing, and by partnering with private sector lenders to provide loans and credit to aid foreign purchasers in buying American-made goods. Many small businesses rely on the bank because commercial lenders typically don’t support small businesses in this area. In fact, nearly 90 percent of the Ex-Im Bank’s transactions in 2013 were for American small businesses.

Additionally, the bank financed more small business exports in the last five years than in the previous 11 years combined. Without it, small business owners say they wouldn’t be able to compete internationally.

One such small business owner is Jenny Fulton, owner of Miss Jenny’s Pickles in Kernersville, North Carolina, whose jarred pickles can be found in grocery stores across the United States and overseas. While Fulton and her business partner quickly found success here at home, she knew that she needed to expand to foreign markets in order to continue growing her business.

“Considering that 95 percent of the world’s population is outside of the United States, we knew that exporting would be crucial to our success,” she said.

Fulton turned to the Ex-Im Bank for help, and she utilized the bank’s credit insurance program so she wouldn’t have to worry about nonpayment from buyers on the other side of the world.

“Thanks to support from the Export-Import Bank, we’ve exported more than 10,000 jars of Miss Jenny’s Pickles to Canada, China and Germany. These exports are crucial to keeping our business afloat. If the Export-Import Bank is not reauthorized, I’ll lose 10 to 15 percent of my business, and I’ll be forced to layoff one of my five full-time employees as a result. And it’s not just my employees that will be impacted; this will have a trickle down effect to the company we hire to pack our jars as well, which has 200 employees.”

Fulton is not alone. If Congress fails to reauthorize the Ex-Im Bank, more than $34 billion in exports will be lost this year, tens of thousands of workers engaged in the exporting business could be laid off, and several thousand exporters—mostly small business owners—will take a substantial financial loss, as will the suppliers who make or grow the products being exported.

Failure to pass a long-term reauthorization of the Ex-Im Bank would be damaging to the economy and place an unfair burden on small business owners like Jenny Fulton and other hard working exporters. It’s time for Congress to find a permanent fix for the Ex-Im Bank so small businesses can have the certainty they need to continue brokering deals with foreign countries that bolster our economy here at home.

Arensmeyer is founder & CEO of Small Business Majority.


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