Cantwell touts Export-Import Bank
Source: Columbia Basin Herald
Columbia Basin Herald - Lynne Lynch
MOSES LAKE - Sen. Maria Cantwell, D-Wash., stopped at the Moses Lake airplane repair station Sonico to tout the benefits of the U.S. Export-Import Bank.
The bank can finance or insure the purchase of U.S. goods by foreign customers.
In two weeks, Cantwell is going to seek an avenue to pass a reauthorization bill out of the Senate, she said on Wednesday.
In Moses Lake, Sonico President Bill Perdue said there are all kinds of small businesses that benefit from the bank.
"We don't think we're alone," he commented. "We're hoping through us and others, she can put a story together to make sure Ex-Im (the bank) gets reauthorized."
Sonico started using the bank in 2008. It is when the company was beginning to see airlines were dealing with many original manufacturers like Boeing.
The domestic airlines were saying they wanted to deal directly with Sonico, Perdue explained.
A foreign market is a "scary market" to a small company, he said.
A large company like Boeing has 90 offices in cities worldwide.
"They have influence all over, we have no influence," Perdue said. "We know if we sell into Israel, Jordan, or Egypt and have trouble collecting that money, it's going to be an effort on our part."
One thing the bank does is allow companies like Sonico to insure the accounts, resulting in Sonico getting paid no matter what.
"You can't imagine to a business owner the relief that gives you because the risk is gone," he said in part.
Once accounts are insured, U.S. banking institutions allow businesses to use the receivables as collateral to borrow money for their operations.
Without the Export-Import Bank, American companies cannot borrow on a foreign account.
Now Sonico is able to borrow 50 percent of the total on the invoices, giving the company the ability to expand in a number of ways.
In the past 2.5 years, they bought new ground support equipment.
Sonico's sales increased from between $3.5 million to $3.7 million in 2009, to $5.5 million in 2011.
The company's growth isn't all due to the bank, but it provides Sonico with more cash to buy equipment.
In three years, the company's overseas sales grew from three countries to 17.
If the reauthorization fails, Perdue would have to let go two to three employees.
Kim Maine, Sonico's corporate services manager, explains no U.S. banks loan money against a foreign receivable.
If the business had a $1 million line of credit and borrows against it monthly to pay bills, it would have to exclude any foreign business.
"That wasn't anything we could use as collateral, that really made a big difference," she commented.
The other story is thousands of businesses all around the country that are helped, as the bank generates job creation, Cantwell said.
During her tour of affected businesses, she visited a Spokane company that builds silos and a seed company.
The program would take $900 million off the U.S. deficit and generated $3.4 billion to the economy, Cantwell said.
"It's one of the programs that actually makes money for the U.S. government," she said.
The bank has a 1.5 percent default rate, according to Jared Leopold, a communications director with Cantwell's office.
About 10 or 12 years ago, a Grant County small manufacturing company went out of business after losing a self-financed deal, said Terry Brewer, executive director of the Grant County Economic Development Council. The company couldn't get paid in China and was bankrupted.
At peak, the manufacturing food processing machinery company employed 25 to 30 employees. Worker numbers dwindled to three employees.
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