N.C. exports are on the rise. No one knows this better than Ethel Torres, the owner of National Drug Source in Concord.
Last year, Torres wanted to expand her medicine distribution business overseas. As a small business owner, Ethel would have to rely on cash-advance payments for any overseas sales, putting her at a competitive disadvantage. So she turned to the Export-Import Bank, a federal agency that provides support to businesses looking to break into foreign markets. Today, thanks to Ex-Im’s support, National Drug Source exports to more than 22 countries.
There are many other firms across North Carolina that are expanding because of Ex-Im. That’s why Congress must reauthorize it.
Despite its name, Ex-Im focuses almost exclusively on exports.
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The bank offers low-cost export credit insurance, covering small businesses if a foreign buyer fails to pay. That lowers risk, empowering companies to expand overseas. To further encourage exports, the bank offers loans and guarantees to foreign buyers of U.S. goods. The bank doesn’t compete with private lenders; it fills in market gaps that would prevent such sales.
In the 80 years since its founding, Ex-Im has developed a stellar track record. Last year, less than 1 percent of loans were in default, besting most private lenders. And Ex-Im makes money for taxpayers, mainly through the fees it charges to foreign buyers. Over the past two decades, it has brought in almost $7 billion in fees.
Despite this success, Ex-Im is at risk. Its charter, which Congress has regularly renewed since 1934, expires this month. If lawmakers don’t reauthorize Ex-Im, it will be forced to close. That would spell big trouble for North Carolina’s economy. This state was hit hard by the recession but has managed to recover, in large part because of its growing export business.
Since 2009, the Ex-Im Bank has helped 137 local small businesses – and 47 larger companies – export $3 billion in goods and services to countries ranging from Mexico to China. Despite claims that Ex-Im only helps big multinationals, 90 percent of its transactions directly support small companies. These transactions have translated into nearly 19,000 new jobs for North Carolina.
The Bank supports companies across North Carolina.
Consider Statesville-based Slade, which makes sealing products for industrial equipment. It started working with Ex-Im in 1997 and now counts on exports to 60 countries for two-thirds of its sales. Or look at Miss Jenny’s Pickles in Kernersville, which turned to Ex-Im Bank for help a couple years ago to sell its gourmet pickles around the world, creating 14 jobs in the process.
The future of America’s economy is overseas. Roughly 95 percent of the world’s customers live abroad.
The Export-Import Bank has been a boon to N.C. businesses. Lawmakers must approve legislation to reauthorize it immediately. If they don’t, our economy will suffer.
Wayne Cooper is Chairman of the North Carolina District Export Council.