'Boeing's Bank' Reaches Out To More Small Businesses
The federal agency that some call "Boeing's Bank" is trying to broaden its appeal. The Export–Import Bank of the US is opening an office in Seattle, one of four new offices nationwide.
The bank provides financing and insurance to companies that want to sell their products overseas.
Boeing is still its largest customer by volume. But the bank is on a mission to help more small and medium sized businesses and to justify itself to Congress.
The bank is looking for people like Mark Williamson. He owns a small engineering firm in Seattle. It builds robotic drilling systems that work on the sea floor.
The company got a chance to take on a deep sea project in India, but it needed capital up front to get started. Williamson says it was a tough sell.
Williamson: "There was no way we could get commercial financing for something like that."
Williamson says commercial lenders wouldn't touch the project: too much risk and red tape. So that's when he turned to the Export–Import Bank. It gave his company a line of credit that enabled him to take on the $5.7 million job.
Williamson: "The Export Bank has been very, very good to us."
The Export–Import Bank is trying to help more small and medium sized businesses enter the export market. Right now, the bank says, only 1 percent of US companies sell their products and services overseas. Bank Chair Fred Hochberg told a gathering of businesspeople in Seattle that fear prevents most small companies from even trying.
Hochberg: "Many people say, my God, you know, it's one thing if I sell to California. But if I sell to New Delhi or New Zealand, how am I going to get paid? How can I take the chance of risking my business? How can I take the chance, even if they are going to pay me in 30 days, and they don't pay for 60, 90, 120, 180 days — I can't afford that."
Hochberg says the Export–Import Bank removes some of that risk, by providing insurance, lines of credit, or long term financing.
But the bank has been under attack in Congress. This year, conservative Republicans tried to block its reauthorization. They said the federal government should not be underwriting risky loans that mostly help large companies like Boeing and Caterpillar.
Ad: "Call Congress, tell them to end corporate welfare. Vote no on the reauthorization of the Export–Import Bank."
That was an ad from the Heritage Foundation.
Bank Chair Fred Hochberg says the bank actually makes money for the US Treasury. And he says the bank serves a vital purpose in helping American companies compete abroad.
Hochberg: "We are not going to compete and win in those countries, and create jobs here at home, without government support. We need support from our embassy, the Commerce Department, and Ex–Im [Export–Import] Bank to make sure those sales stick. Because that's what our competition is dealing with each and every day. And there are some people who just don't like that idea, they believe in an ideal world you don't need any government role. But we don't live in that world."
Congress eventually saved the Export–Import Bank after Senator Maria Cantwell helped broker a compromise. But it's a temporary measure, and Cantwell says in another three years, supporters of the bank will have to fight again.
I'm Deborah Wang KUOW News.
© Copyright 2012, KUOW
KUOW does not endorse or control the content viewed on these links as they appear now or in the future.
- The Real Story Of Washington Mutual: The Biggest Bank Failure In US History
- 'Free' Checking, Escape From Honduras, And 'The Grand Design'
- Global Eye Banks, Fighting For Peace, And Being With Animals
- Alternative To State Bank Gains Traction
- State Schools May Set Tuition, Domestic Violence Murders, And Failing Banks