Aug 21, 2014 - 11:00am

Need Credit Insurance? Your Only Option—the Export-Import Bank—Might Be Gone by Sept. 30

Fellow, International Policy

While few of us have much, if any, experience with trade finance, U.S. firms like Rosenbauer America, which  produces fire and rescue trucks, quickly learn that if they want to export, they must let overseas customers buy on credit. In today’s highly competitive, global market, buyers know they can demand financing options up front. And if U.S. firms don’t, their European, Canadian, or Asian competitors certainly will.

These are tough realities, and it gets even more challenging for small  exporters in the U.S.: Commercial banks often turn them down. Sales manager Jeremy Kemp of the Mathews Company, a family-owned manufacturing business, looked for private export financing options, but bankers all turned him down, saying “Ex-Im is your option.” For small exporters like the Mathews Company, Ex-Im is the only game in town.

Right now, small businesses can turn to firms like Tarnet Insurance Services, a specialty broker for both private and Ex-Im credit insurance. Owner Brett Tarnet explains that Ex-Im often provides those small credit insurance policies that get turned down by commercial banks. She cites an e-mail she received from a private market underwriter on July 31, 2014: “Because of the reduction in volume, the premium figure of $15,000 reflects our lowest premium for our [credit insurance] policies.”

Tarnet contrasts this $15,000 number with her Ex-Im figures: “Our average Ex-Im credit insurance premium is $3,148. Of the nearly 165 companies we serve that use Ex-Im, only 4 have premiums over $15,000.” Further, private credit insurance is not even available for some markets, including many countries in Africa and the Middle East. “Ex-Im is the only option for these guys,” says Tarnet.

Ex-Im credit insurance covers most countries and doesn’t have a minimum premium. “Our lowest was $3.90,” says Tarnet. “Over and over I’ve seen the same story. A company starts exporting a couple grand here and there with Ex-Im credit insurance, and in a few years they get so big they don’t need it; they graduate from Ex-Im. But without Ex-Im, they never would’ve had that engine of growth.” Bridge to Life Solutions Ltd. in Columbia, South Carolina is one such success story. Chief commercial officer John Bruens says, “Ex-Im worked so well, we no longer needed it.”

The twist in this tale is that the U.S. Export-Import Bank may be forced to close its doors if Congress doesn’t renew its charter by September 30.

If Ex-Im is closed, thousands of small American exporters will not be able to get credit insurance. Without credit insurance, they will lose much of their export business and be forced to lay off employees.

Will the private market step in? Tarnet says no: “No one is going to write a $15,000 check to support a few thousand dollars’ worth of exports. These guys saying that there is a private market solution are completely wrong.”

As American manufacturing continues its gradual recovery from the recession, Congress should work to support it — not kill it. For the sake of America’s small exporters, Congress must renew Ex-Im.

Support Ex-Im reauthorization and send Congress a letter at

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About the Author

Fellow, International Policy