Many small businesses are expected to be impacted next month if Congress fails to push through the latest Export-Import Bank reauthorization, a measure which has been given a renewed push for action by the GOP after the Senate didn’t approve its reauthorization. The Export-Import Bank has proven to be a critical support to small businesses looking to grow into international markets, allowing them to better compete with major manufacturers all over the world. According to Bank chairman Fred Hochberg, 87 percent of transactions and 20 percent of financing dollars go directly to small businesses. Without the necessary loan guarantees and other services the bank provides, companies that rely on exports for revenue may see deals falling through and potential growth stymied. In fact, the current debate is already beginning to affect some small businesses, with uncertainty endangering deals and encouraging international companies to look elsewhere.
While there are many complicating factors affecting the Export-Import Bank’s authorization, one primary influence is an ongoing dispute between major corporations Boeing and Delta, which led to Delta suing the Export-Import Bank over loans it distributed to Air India to buy planes from Boeing. In addition, the airline industry is now lobbying heavily against reauthorization and possible expansion of the bank’s scope. Partisan maneuvering is also being cited as a source of the reauthorization measure’s failure, although after the measure’s initial failure a group of twenty-five or so Republicans sent a letter to Majority Leader Harry Reid urging action and confirming support for the bank.
Founded in 1934, the Export-Import Bank is a federal agency offering loans, loan guarantees, and insurance to both American exporters and foreign buyers. Essentially, the Export-Import Bank’s charter must be periodically renewed by Congress in order to continue lending. Its current authorization expires May 31, and so without congressional action, the bank will be forced into inactivity by June 1.
Martin, Eric, and Roth, Bennett. “Boeing Taps D.C. Lobbyist in Export-Import Bank Renewal Push.” Bloomberg Businessweek. 3/20/12. (4/4/12.) http://www.businessweek.com/news/2012-03-20/boeing-taps-top-d-dot-c-dot-lobbyist-in-export-import-bank-renewal-push.
Rogers, David. “Senators Push Export-Import Bank Renewal.” Politico. 3/29/12. (4/4/12.) http://www.politico.com/news/stories/0312/74637.html.
Tozzi, John. “Small Businesses Caught in Battle Over Export Aid.” Bloomberg Businessweek. 3/26/12. (4/4/12.) http://www.businessweek.com/articles/2012-03-26/small-businesses-caught-in-battle-over-export-aid.