The U.S. Export-Import Bank, often referred to as Ex-Im, hit headlines last month when news emerged that Congress had allowed the financier’s budget to run out, forcing its trade financing operations to halt. Critics of this decision say that the Ex-Im Bank isn’t just crucial for large corporations, but it also provides the necessary funds for businesses overseas to procure from small suppliers in the U.S.
In a report of its 2014 finances, the bank claimed that more than 3,300 of its financing deals went to small businesses, making up 90 percent of its loan authorizations. But in reports by the Washington Free Beacon, senior research fellow at the Mercatus Center at George Mason University Veronique de Rugy clarified that the value of those loans amounts to less than one quarter of the Ex-Im Bank’s funding.
“The value of the authorizations was $20,482,747,763.60 with $5,062,548,168.62 — or 24 percent — going to small business,” de Rugy said in an email to the publication. “That means that 75 percent of the bank financing benefited large companies. In 2013, 64 percent of the money benefited 10 giant companies.”
De Rugy was clear about holding the position that the Ex-Im Bank has been deceptive in its claims that it focuses its efforts on supporting SMEs. “Considering these numbers, it is strange anyone would claim the bank is about small business,” de Rugy added.
According to the figures, 80 percent of the bank’s financing went to finance projects worth more than $10 million last year, largely leaving out small businesses from the mix. The Boeing Company, one of the bank’s largest clients, reportedly received 40 percent of the bank’s funding authorizations last year.
The financing unit is still in limbo as lawmakers explore whether — and how — to renew the Ex-Im Bank’s budget so it can continue to lend to companies that want to buy from U.S. corporations. But de Rugy’s statements join the opposition to the financial institution, arguing the lender is only in the business of Big Business.
In response to Congress’ decision not to renew the budget, House Financial Services Committee Chair Rep. Jeb Hensarling (R-TX) said the move “is a small step toward renewing a competitive free-market economy and arresting the risk of the progressive welfare state and the cronyism connected to it.”