Potential End to U.S. Export-Import Bank May Impact Illinois Exports

Export-Import Bank, small business owners, Naperville small business lawyer, Gierach Law Firm, exporting productsIllinois is one of the top five states in the nation when it comes to exporting services and goods abroad. In fact, the state exports over $66 billion in services and goods each year, allowing international trade to account for 10 percent of the state’s total economy. Part of the reason that states such as Illinois have been able to become successful exporters has been through the assistance of the U.S. federal Export-Import Bank. Interestingly enough, many small business owners in Illinois have never heard of this bank, which was created in 1934 to help assist competitive businesses with financing the costs that come with exporting products to foreign markets. Sadly, the Export-Import Bank may soon be a thing of the past if its charter is not renewed.

The U.S. Export-Import Bank

The Export-Import Bank is one of the few federal institutions that has enjoyed bipartisan support over the past decades. The Export-Import Bank is there for small businesses when the rates of private lenders are too expensive and not competitive enough to benefit a business in the long run with export operations.

In Illinois, the Export-Import Bank has partnered with over 300 Illinois businesses, two-thirds of which were considered to be small and mid-size businesses. The Export-Import Bank has had an especially important influence on the manufacturing sector of Illinois. In Illinois, one-fourth of all manufacturing workers are employed in the export industry, and those in the Illinois manufacturing sector earn higher salaries than the overall national average for this set of workers.

Amazingly, the Export-Import Bank operates at only a negligible cost to taxpayers, and mainly operates through the funds it receives from collecting interest on loans it provides to U.S. businesses, as well as from services fees. In fact the Export-Import Bank is so profitable that last year it paid $1 billion into the U.S. Treasury.

Implications for the Closing of the Export-Import Bank

The Export-Import Bank has functioned for decades as the lender of last resort for export businesses that have the products that will succeed in foreign markets, but that find it difficult to absorb the costs of tariffs, export taxes, and other expenses that come with exporting goods and services to foreign countries. The global marketplace is only quickening in pace with each year, and a U.S. without the Export-Import Bank would be a country that would not be able to properly compete in the global marketplace.

Over 50 countries have agencies that are similar to the Export-Import Bank and many of these agencies’ primary goal is to assist their country’s business owners with creating and exporting goods that decrease the overall demand for exports from the U.S. The closing of the Export-Import Bank would greatly increase the overall costs facing U.S. exporters, making their export products more expensive, and thus less attractive in the global marketplace.

Congress has a big decision to make about whether to reauthorize the U.S. Export-Import Bank’s charter. If you have questions about the Export-Import Bank or about small businesses, a Naperville small business law attorney at the Gierach Law Firm can help.