Today is an incredible day for Manufacturers, small business owners and supply chain professionals everywhere as the President revives the Export-Import Bank’s charter. The highway bill with the attached Ex-Im Bank legislation has passed through all the necessary channels for the bank to begin offering new credit for businesses that export globally. The Bank will stay active until 2019 and will continue to provide financing for businesses of all sizes when exporting to foreign entities.
It was strange that there was so much opposition focused on killing the Ex-Im Bank in the first place. When looking at the program, you can clearly see the Ex-Im Bank does not rely on taxpayer dollars, and is also one of the only government programs that actually makes a profit. Along with the money it adds to the treasury, it creates thousands of jobs and leads to millions, and even billions, of dollars in profits for small and large businesses alike.
Tea Party conservatives such as Ted Cruz, and financial backers like the Koch Brothers, put in great effort to shut the bank down because of their belief that the government should not get involved in U.S. business. The problem with this is that small manufacturers and businesses that want to compete globally are not able to receive the financing they need from private lenders and without the Ex-Im Bank there would be no hope for them to reach the global market. Once the Ex-Im Bank was shutdown, the fallout was seen almost immediately. Small manufacturers had to lay off employees and the larger manufacturers like Boeing and GE had to move overseas to secure financing from foreign Export Credit Agencies.
The Shutdown had a severe impact on the overall economy, businesses and local communities struggled all over the nation. This 81 year old program has continued to help businesses of all kinds that export globally, as well continuing to make a profit year in and year out. Furthermore, the default rate for Ex-Im Bank’s loans are extremely low. In September of 2014 the default rate was 0.175%, an impressive rate to say the least.
We are excited about the fact that Senate, Congress and the President have overwhelmingly agreed to reinstate the Export-Import Bank program to give U.S. businesses of all sizes the ability to compete globally. Many call the program “corporate welfare”, but the fact remains that only large corporations would be able to thrive without the Ex-Im Bank. If the Ex-Im Bank was killed, the only winners would be the behemoth companies, as small companies would need to lay off their employees and even go out of business, which would cripple local economies and communities. Reauthorizing the Ex-Im Bank was a huge win for U.S. manufactures.