US Export-Import Bank Must Be Reauthorized
| By Michael Castellano
NGLCC consistently encourages its members in the LGBT business community to consider exporting as a business growth strategy and to utilize the resources offered by the United States Export-Import Bank, or the Ex-Im Bank for short. Justin Nelson NGLCC President shared, "We have been doing a series of educational workshops at our conferences over the last couple of years so LGBT business owners start to realize the opportunity in exporting… Ninety-five percent of the world’s consumers live outside the U.S. borders, so having an organization like the Ex-Im that can come in and can work with our small business exporters—LGBT-owned businesses and non-LGBT owned businesses—is a huge opportunity.1"
This month, NGLCC will host Ex-Im President Fred Hochberg, who happens to be the most senior openly LGBT person in the Obama Administration, to speak in the NGLCC Innovation Center powered by Wells Fargo about the future of Ex-Im.
To provide context, President Franklin D. Roosevelt established the Ex-Im Bank in 1935 under an executive order, and it officially became an independent agency in 1945, serving as the US Federal Government’s export credit agency. In 2012, Congress renewed the Ex-Im Bank’s Charter for a period of three years, meaning that if not renewed, the Ex-Im Bank will cease to exist after June 30th of this year.
The Ex-Im Bank represents a vital resource to small and medium sized enterprises (SMEs) across America in accessing that 95% of the world’s customers that live outside the US. Rather than compete with traditional lenders in the private sector, Ex-Im provides financing options for trade transactions that may involve an inherent credit risk that would be unfavorable to a traditional lender. By financing and insuring foreign purchases of US goods, the Ex-Im Bank supports the growth of US SMEs and creates jobs by promoting and facilitating exports overseas.
EXPORTING PAYS OFF
According to the Bank’s Charter, “not less than 20%” of the Bank’s dealings must be with small businesses. The Ex-Im Bank has more than maintained this rule by supporting over $250 billion worth of exports by US companies, 90% of which was small business. Just last year, the Ex-Im provided $27.5 billion of support to 3,700 companies—of which 39%, or $10.7 billion, went to small businesses—generating more than 164,000 jobs here in the US.2
In addition to financing, the Ex-Im Bank assists US SMEs in becoming competitive in global markets by building their capacity through workshops and trainings to increase knowledge about exporting within the small business community. By competing in a global economy, exporting companies are often more innovative. Statistics show that employees of companies that export earn 18% more than companies that do not export, and SMEs that export increased their overall total earnings by 37%, while those SMEs that do not export have actually seen a decrease of as much as 7%.3
Unfortunately, too many SMEs are missing out on opportunities to sell their goods and services overseas. Currently, only 14% of the US GDP comes from export revenue, which puts US exports on par with countries such as Haiti and Rwanda.4 The US small business community, in particular the LGBTBE community, has an enormous amount of talent and potential, and for this reason, the NGLCC continues to work with the Ex-Im Bank to build the capacity of LGBTBEs to reach new markets.
The NGLCC does not only encourage exporting to LGBTBEs in the US, however. There are similar export credit agencies in 60 other countries, and NGLCC promotes exporting to registered suppliers around the world as a strategy for economic growth and development within their local LGBT communities and as a way of fostering a more inclusive global economy. NGLCC Global was recently in Medellín, Colombia to co-host #ActivatingLGBT, with the Colombian LGBT Chamber of Commerce (CCLGBTco). The series of events are designed to inspire or “activate” regional LGBT business communities and connect them with US LGBTBEs. Medellín is the second largest city in Colombia, but the number one in terms of exporting and, in 2012, NGLCC Corporate Partner Citi and the Wall Street Journal named Medellín the “Most Innovative City of the Year.” In sharing the message of exporting to LGBT businesses in places such as Medellín, NGLCC is not only working to grow local LGBT business communities, but is also identifying strategic partners around the world for US LGBTBEs that want to take advantage of the international business resources made available to them.
CALL TO ACTION
Without action, the incredible resource that is the Ex-Im Bank could cease to exist after June 30, 2015. This would be a devastating loss for the LGBT business community and SMEs across the US. As such, NGLCC fully supports the reauthorization of Export-Import Bank.
NGLCC urges our members to contact their members of Congress and encourage them to reauthorize Ex-Im Bank and the important work it does for American small business. Specific bills related to Ex-Im reauthorization include the following:
House of Representatives: House Financial Services Committee, H.R.597, H.R.1008, H.R.1031
Senate: National Security and International Trade and Finance Subcommittee, S.824
You can also show your support on Twitter at @eximbankUS, hashtag #exim4jobs. While there be sure to follow @nglcc, hashtag #lgbtbiz and #nglccGlobal.
3 Center for Strategic International Studies