Washington DC- With days to go before the deadline, U.S. Senator Bob Casey (D-PA), highlighting local data, called for the reauthorization of the Export-Import Bank (Ex-Im) that helps Pennsylvania small businesses access new markets and create jobs. The Ex-Im Bank has aided 193 small businesses in Pennsylvania since 2007, helping 314 of the state’s exporters process $7 billion in transactions. With some in Congress pushing to end the Ex-Im Bank, its charter could expire on June 30th without action. Casey highlighted data showing the economic impact the Ex-Im Bank has in each congressional district in Pennsylvania.
You can find data on the Export-Import Bank’s impact in Pennsylvania by zip code and congressional district here: http://customermap.exim.gov/state_map.cfm?state=PA
“Small businesses looking to enter foreign markets can face any number of hurdles to competing abroad. Companies find themselves caught in a dynamic where foreign banks refuse to finance overseas products, while American banks cannot provide financing due to regulatory or legal hurdles,” Senator Casey said. “It’s time to reauthorize the Export-Import Bank and give businesses in Pennsylvania and across the nation the certainty they need.”
Quotes from Pennsylvania businesses:
Danny Roderick, CEO of Westinghouse (Cranberry Township, PA)
“[Without Ex-Im,] we may continue to develop [manufacturing] technology in the U.S., but we may have to move our factory overseas just so I can get a foreign country to give me financing for goods and services made in that country.”
Michael Strange, President of Bassetts Ice Cream (Philadelphia, PA)
“As a small U.S. business, we do need [Ex-Im], and I would not be exporting the quantity of product I am in China if I wasn’t able to purchase export credit insurance [from the bank].”
“Our business is growing because of exports. This has helped us maintain jobs, and I have no doubt we will add jobs in the future. Already one of our suppliers in Johnstown, Pennsylvania, which produces our super-premium ice cream according to our recipe, has added staff to its production operation.”
The Export-Import Bank of the United States (Ex-Im) has been the official export credit agency of the United States since 1934. Ex-Im helps finance U.S. exports in circumstances when alternative financing is not available. For example, in some cases, foreign banks may be unable to provide financing for products from overseas due to regulatory hurdles or financial limitations. The Ex-Im Bank fills these gaps through a variety of services to ensure competitive financing for U.S. exporters. Its main programs are loan guarantees, direct loans, working capital finance, and export credit insurance.
Because the Bank uses offsetting collections to cover the costs of its operations, Ex-Im has been self-sustaining for appropriations purposes since Fiscal Year 2008. Additionally, the Bank frequently contributes excess funds back to the Treasury, including $1.06 billion in FY 2013. However, Congress sets an annual cap on Ex-Im’s aggregate loan level. In FY2013, this cap was $130 billion. Ex-Im loans typically enjoy a very low default rate, and since 1992, Ex-Im has recovered 50 cents on the dollar for transactions that enter into default.
The Bank operates under a renewable charter. Historically, Congress has included provisions in the charter designed to ensure that Ex-Im financing must supplement, rather than crowd out, private capital. Ex-Im is also a participant in the OECD Arrangement on Officially Supported Export Credits, an international agreement that sets common rules for export finance agencies.
The Bank’s charter, last extended in September 2014, is set to expire on June 30, 2015. If Congress does not act to reauthorize the charter, the Bank’s doors will close.
In Pennsylvania, since 2007, the Bank has completed:
- Roughly $4 billion in transactions;
- Benefitting 314 Pennsylvania exporters, including 193 small businesses; and
- Supporting about $7 billion in export sales for Pennsylvania businesses.