Last night at about 9:30PM, the Senate passed the final version of the Export-Import Bank Reauthorization bill (S. 3938), and sent it to the President’s desk for his signature. After nearly two years of oversight by the House Small Business Committee, this has been a long day in coming. I have been working on getting more small businesses engaged in the international marketplace ever since I was first elected to Congress in 1992 and this bill contains the most far-reaching reforms I have ever seen in export finance for small businesses during my tenure.
I am excited about the prospects for small business exporters in this bill. This bill might be more appropriately titled, “The Small Business Export Finance Enhancement Act of 2006.” It will certainly give Ex-Im the tools necessary to meet and exceed the 20 percent goal for small business that Congress set as a new target during the last reauthorization bill in 2002. Earlier this year, the Government Accountability Office (GAO) released a study, which I requested, that showed the Ex-Im Bank has consistently missed its statutory 20 percent set aside mandate for small business since Congress increased the mandate in 2002.
How does this bill help small business exporters? The two main problems that I hear over and over again from small businesses interested in selling abroad are (1) finding reputable customers overseas and (2) finding a financing mechanism to complete the sale. This legislation helps solve the second problem.
First, S. 3938 restores a viable Small Business Division at the Export-Import Bank of the United States, headed by a Senior Vice President who will report directly to the 5 Member Board of Directors of Ex-Im.
Second, S. 3938 authorizes the placement of small business specialists within each division of the Bank and gives them the ability to approve loans, guarantees and insurance policies at recommended levels up to $10 million. This will help speed up consideration of small business applications by experts who will know what is necessary to help small businesses successfully compete overseas.
Third, S. 3938 allows the Senior Vice President of the Bank’s Small Business Division to intervene and advocate for small business exporters in specific transactions.
Fourth, S. 3938 codifies a Small Business Committee, with representatives from each division within the Bank, where new ideas for products and services can be developed and implemented.
Finally, and most importantly, S. 3938 enhances Ex-Im’s delegated loan authority to private banks for medium-term transactions. Most of the previous problems with Ex-Im Bank focused on the lengthy delays in getting a decision on medium-term (defined as a loan with a 3 to 7 year maturity) applications for small exporters. These tended to be the larger export transactions that could make or break a small firm. This provision will have the private sector perform most of the due diligence with final approval resting with Ex-Im.
I was pleased to work with my colleagues on the House Financial Services Committee and the Senate to restore a viable Small Business Division within Ex-Im and place small business specialists within each operating division of the Bank who will be able to expeditiously approve loans, guarantees or insurance for small employers exporting overseas. Although they employ the majority of Americans and create most new jobs each year, small businesses do not sell as much overseas as they should. This legislation will help them increase their exports so they can prosper and create more jobs for Americans. I look forward to the day the President signs this historic bill into law and to reviewing its implementation in the coming months ahead as a Member of the Financial Services Committee.