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The House of Representatives headed for home this week without renewing the Export-Import Bank (Ex-Im). In doing so, they left many small business owners without the support they need to export their products around the world.
One of those companies, for example, is Headworks International, a small business that manufactures water treatment equipment in Houston, Texas. Headworks, which employs 37 people and has repeatedly ranked as one of the top women-owned firms in the country, exports those products to 35 countries with the help of loans and insurance from Ex-Im.
Soon, those lines of credit will run out, and without its charter renewed, Ex-Im cannot renew its loans or insurance services for Headworks. While it once looked like that might only be the case for a few weeks, it’s now clear that lawmakers won’t breathe new life into the bank until at least September, if not later.
It didn’t take long for Headworks to start feeling the effects. Michele LaNoue, the firm’s chief executive officer, said that the company started to see the potential loss of sales only a couple days after the agency’s charter was allowed to expire on June 30. Prolonging Ex-Im’s closure will only pile on more pain for her company.
“Without Ex-Im Bank, we are handicapped in doing business abroad,” LaNoue said. “The loss of credit means that we may have to stop growing our international business entirely.”
Naturally, that could curb her payroll. “We market in 35 countries, and losing the brand recognition we have built jeopardizes not only our overall growth in the future, but the jobs of people we employ here in the U.S. today,” she said.
More than 2,000 miles away, Patrick Kruse finds himself in the same boat. His Bend, Oregon-based company, Ruffwear sells canine performance gear for service dogs and pets to customers in Japan, Korea and several nations in Europe. But that’s only possible, he said, because of the export credit insurance he has secured from Ex-Im.
“The expense of navigating these international trade rules and regulations creates considerable strain and overhead on small businesses’ limited resources,” he said. “The Ex-Im insurance program has allowed us to open markets, create new partnerships, and compete on a global stage by offering customers credit that we could not get elsewhere.”
Not any longer, though. Sadly, LaNoue and Kruse are hardly alone, as thousands of U.S. small businesses -- and by extension, tens of thousands of jobs -- depend on the agency that federal lawmakers just left town without saving.
“If Ex-Im isn’t reauthorized soon, American workers and companies will pay the price in lost sales and lost jobs.” Bruce Josten, U.S. Chamber of Commerce’s executive vice president for Government Affairs, this week told Roll Call. “America’s small and medium-sized companies will pay a particularly high price for the failure to reauthorize Ex-Im.”
In many cases, small businesses and their employees are no longer bracing for impact -- they’re already feeling the pain. Back in Texas, executives at Olney-based Air Tractor, which builds and sells firefighting and agricultural aircraft, say they will lose as much as one-fourth of their sales now that they have lost Ex-Im’s export credit insurance.
“We’re scrambling now, trying to find a way to facilitate our sales throughout the rest of this year,” Tyler Schroeder, a financial analyst at the company, told Politico. “That’s going to take a lot of risk on our part of the company, and... it’s going to be a big expense for us.”
How long the firm can sustain that expense without cutting employees isn’t clear -- which makes it imperative that lawmakers revive the bank when they return in September.
“We can only do this for so long,” Schroeder said. “When it comes to next year’s export season, we don’t know. We don’t have an answer for how we’re going to fill the gap that’s been left by Congress’ blatant disrespect for business, in my opinion.”