Small-Exporter Support Facing Uncertainty

the Senate passed the bipartisan Export-Import Bank Reauthorization Act of 2012 by a vote of 78-20, extending the Bank's authority through 2014 and increasing its cap to $140 billion. President Obama, who has set a goal of doubling the nation's exports by the end of 2014, issued a statement in support of the reauthorization.

Ex-Im Bank is a federal agency that provides direct loans, loan guarantees and insurance to businesses that export. A large part of its role is to support small-business exporters. The last charter for the Ex-Im Bank expired Sept. 30, and has been extended three times. The latest extension will expire May 31. A charter authorizes the Ex-Im Bank's operation for four to five years.

What could the Ex-Im Bank do for your business?

1. Guarantee loans: Most of what the Export-Import Bank does is guarantee loans that banks make to companies that want to purchase U.S. goods. The Ex-Im Bank's loan guarantee is typically between 90 percent and 100 percent of the loan.

2. Make direct loans: Between 9 percent and 10 percent of what the Export-Import Bank does is direct loans, providing funding either to businesses that are buying U.S. goods and services or to U.S. companies that need working capital to fulfill a contract they have to export their goods.

3. Provide insurance of receivables: The Export-Import Bank will insure that businesses get paid for sales they make to foreign countries. "A lot of companies are uncomfortable selling to Indonesia or other developing countries because of the difficulty in getting paid," says Cogan, where there is a different legal system and way of doing business. With insurance from the Ex-Im Bank, if a business does not get paid, the Ex-Im Bank will pay the business and go after the claim with the force of the U.S. government behind the effort.

© 2015. All Rights Reserved for Arya Zima.