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TIMMONS and WETHERINGTON: Ex-Im Bank boosts small business
America can create jobs by exporting more
BTE Technologies has more than doubled the size of its workforce in the past decade. This Baltimore manufacturer of physical therapy and sports medicine equipment would not have been able to create many of these jobs without new international trade opportunities and the assistance of the U.S. Export-Import Bank.
Ten years ago, BTE Technologies did most of its business within the United States, sending less than 2 percent of its sales overseas. To expand, BTE needed new customers. The answer was new markets abroad. With a new commitment to exports, revenues from sales to customers overseas jumped by 20 percent by 2006. But obstacles remained, particularly in the way that buyers abroad could finance BTE's products. As a smaller manufacturer, BTE couldn't take big risks and had to require buyers to either pay for their purchases upfront or provide an assurance that they had sufficient resources. While these conditions provided certainty to BTE, they severely constrained its efforts to reach many new international consumers.
That's where Export-Import Bank stepped in. By tapping into some of the financing tools Ex-Im Bank offers to small businesses like BTE, the company was able to double the revenues it earns from overseas sales.
Today, BTE exports to China, Russia, Japan, Korea, most of the European Union and other countries - almost 40 in total. With the assistance of Ex-Im Bank, BTE is negotiating a deal to export to Saudi Arabia in the near future - a relationship that would contribute upward of 10 percent of the company's total product revenues.
BTE is not alone. Many other small businesses have sought the assistance of Ex-Im Bank and reaped the benefits of expanded market access. In fact, most of the bank's activities directly support small businesses. In today's global economy, seeking out opportunities abroad is indispensable.
With 95 percent of the world's consumers living outside the United States, domestic manufacturers no longer have the luxury of selling only to American consumers if they want to expand and create new jobs. When it comes to manufactured goods, productivity is outstripping domestic demand. Manufacturers in the United States can produce more than Americans can consume, so we must export to other markets that are growing quickly.
With those new export opportunities, U.S. manufacturers create jobs. BTE's job creation success is just a microcosm of the complete jobs story. According to the U.S. Department of Commerce, a $1 billion increase in exports creates or supports more than 6,000 manufacturing jobs. Exports have a real impact, and that impact is strengthened through the work of Ex-Im Bank.
Ex-Im Bank is a success story. In an age of rising debt and deficits, it is returning money to the Treasury - $3.4 billion in the past few years - because it charges interest and fees for its financing products. The funds it takes in cover the agency's operating expenses, meaning it doesn't cost the taxpayers money to run and is a net plus for the government's balance sheets. Yet, despite the bank's contribution to our country and its economy, the tools the bank provides to small businesses are in jeopardy. On May 31, the authorization for the bank expires. Adding to the urgency, the bank may be unable to help businesses finance new transactions if Congress fails to act within the next few weeks. A long-term reauthorization of the bank with more flexibility to assist with new transactions would help bring certainty to manufacturers looking to export their products. Otherwise, businesses here will be left on the sidelines as other nations take aggressive steps to increase their presence in new markets.
Exports are playing an increasingly important role for U.S. manufacturers of all sizes - but especially small and medium-sized business like BTE. Their growth and ability to create jobs depend on their ability to find new customers for their products, and Ex-Im Bank has opened doors to growing new markets.
Jay Timmons is president and CEO of the National Association of Manufacturers. Chuck Wetherington is president of BTE Technologies, Inc.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
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