Local businesses react to Ex-Im Bank's charter expiration
JEFFERSON CITY - Congress let the Export-Import Bank's charter expire at midnight Tuesday, meaning at least six mid-Missouri companies cannot apply for new loans.
In a press release Senator Claire McCaskill said businesses like Emergency Medical Supplies Professionals (EMS) in Jefferson City use Ex-Im Bank for exporting goods.
McCaskill said the bank "provides U.S. businesses with loan guarantees, direct loans, and credit insurance when private lenders cannot or will not take on the risk. This frees up businesses to compete for goods and services in foreign markets which creates new jobs in the US and grows the economy."
According to USA Today, in recent years, "the bank has come under increased fire by conservative lawmakers and activists who label it corporate welfare. They want the bank to expire and slowly wind down its current loan contracts." The article continued, "Democrats have become some of Ex-Im's biggest defenders on Capitol Hill."
EMS Professionals owner Marsha Everts said her company uses Ex-Im Bank to export goods to Dubai.
"We are a small business," Everts said. "Right now Ex-Im Bank is the only bank that will help small businesses like ours."
Everts said her company is in the middle of expansion with her current client in Dubai. She said it needs the reauthorization of Ex-Im Bank to continue expanding.
"We are working on large, large sales with them," Everts said. "And currently right now we would not be covered with our current insurance that we have. Therefore we would be back to cash upfront or that's a risk that we take with the current terms that we offer them which is net 30 terms."
The Associated Press pointed out that although it cannot give new loans, "it will stay in business for the time being to service more than $100 billion in outstanding loans and guarantees, and no immediate layoffs or changes are planned, bank officials said. The bank is funded through Sept. 30."
Everts said because her company's current loan is not enough to cover its expansion, but she plans to continue exporting even without an insurance loan.
"We do not have any other options as far as insurance," Everts said. "Ex-Im Bank is the one for us. It would be a risk that we would take."
Environmental Dynamics International (EDI) said it did not want to take the risk and switched from using Ex-Im Bank to private financing back in December 2014.
Vice President of Operations Fred McCabe said EDI stopped using Ex-Im because Congress renewed it on a temporary basis for the first quarter of 2015.
"It's better to go back and use standard bank line of credit and finance options that way," McCabe said. "We used Ex-Im for about two years and then looked at other options and chose a different direction because we knew it eventually might not be in existence."
He said the tone of Congress' debate gave his company an early warning to switch banks.
"The debate tone was much different this time around so we got a plan in place to protect the company," McCabe said.
Ex-Im Bank has been the United State's official export credit agency since 1934.
According to USA Today Ex-Im's supporters said they "will seek to renew the charter retroactively next month."