1 reads
Leave a comment

After Steward made brief remarks, Hochberg said he worked for the Small Business Administration when WWT – now a $7.5 billion company with 4,000 employees – was still classified as an 8(a) business. The 8(a) Business Development Program is a business assistance program for small disadvantaged businesses.

“There is not a more successful example of an 8(a) company in the entire country than World Wide Technology,” Hochberg said.

Hochberg also had warm words for his local host, Congressman Clay, a senior member of the House Financial Services Committee, which oversees the bank. Hochberg said Clay and the entire Missouri congressional delegation were supportive of the Export-Import Bank during a bitter struggle for its reauthorization that resulted in the bank lapsing for five days and four months (“not that I was counting,” Hochberg quipped). When the bill to reauthorize the bank was finally passed by Congress and signed by the president, Hochberg said, “Congressman Clay was the first to call to congratulate me” – and to invite him to St. Louis for this forum.

It was an informational forum designed to educate local business owners about the services provided by the Export-Import Bank. Hochberg said its primary role is two-fold: “We reduce risk and unleash opportunity.”

The bank reduces risk, he explained, by offering export credit insurance. This product addresses the fear many business owners have in starting new business overseas: “How am I going to collect on a sale five, six, seven thousand miles away?” This insurance transfers the debt from some small business in, say, Missouri, to the U.S. government.

“We pay, then go collect,” Hochberg said. “People don’t like to default on the U.S. government. Remember gunboat diplomacy? That was collecting debts.”

Mark Klein, the regional director for the Export-Import Bank based in Chicago, later tried to remove the hint that the U.S. military would be sent out to collect on the bank’s debts. “But bad things do happen when a government export credit agency starts collecting from you,” Klein said. “Your bill tends to move to the top of the stack.”

Hochberg said their insurance also has worked as a sales tool for many companies that use the service, including Rogue Ales out of Oregon, which found that one overseas buyer doubled its order with the bank’s credit insurance.

The bank “unleashes opportunity,” Hochberg explained, primarily through its working capital guarantee program. This program helps provide American businesses doing exports with operational funds. “We give a 90 percent guarantee to your local bank to give you working capital,” Hochberg said, “while you wait for payment from overseas.”

Charles Alack, the CEO of Semi-Bulk Systems, Inc., based in Fenton, spoke on a panel of Missouri companies that do extensive export business. Alack and a partner purchased from Monsanto Company two technologies that they developed when they worked for Monsanto. Now they have many global clients that purchase their systems for mixing powders that go into everything from ice cream to toothpaste to paint.

“Selling to industrial clients, there is a lot of competition that puts pressure on contractors to stretch out the payment terms,” Alack said. “There is no way we could do that without the bank’s help.”

Right now, Alack said, the company is working out a deal with the largest paint customer in India. “The payables are solid,” he said, “but we do need to finance it.”

John Clark, CEO of Masterclock, based in St. Charles, said his company is not yet an Export-Import Bank client, but it will become one now that he knows of its services. In fact, he once used a ruse claiming to have something like export credit insurance to get an overseas client to pay up.

Masterclock makes precision timing instruments, and Clark negotiated a large sale to a new client, a jewelry factory in Vietnam. The agreement was that the client would pay 50 percent up front, then Masterclock would send the product. If it worked, then the client would pay the other half, and if not both the product and the first payment would be returned.

When Clark’s emails to the client were ignored for 45 days after delivery of the product, Clark warned his contact at U.S. Commercial Services (the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration) that he would use him in a false threat. Clark then emailed the client, copying U.S. Commercial Services, threatening to begin a collection action “backed by the power of U.S. Commercial Services” – and the client coughed up the monies owed.

“Nobody really wants to screw around with the U.S. government,” Clark said. “Partnering with the Export-Import Bank will give me the confidence that we know we will be able to go collect these funds.”

Alack said the protections the bank provides are essential to a U.S. company doing export business. “You can’t even think you are in the export business,” he said, “without this support.”

Clay said the Export-Import Bank supports almost 20,000 jobs in Missouri and it has helped generate $1.47 billion in exports from the state since 2007. He said the bank has helped 125 Missouri companies create 9,390 direct jobs and another 10,000 jobs from secondary suppliers.

“The bank’s support has been especially important to small and medium-sized businesses,” Clay said, “which account for nearly 90 percent of the bank’s transactions. Tens of thousands of smaller companies that supply goods and services to large exporters have also benefitted from the bank’s activities.”

The bank generates revenue – $7 billion in revenue above its operating costs, according to Clay – which it pays into the U.S. treasury.

And the bank is open to new business. Self-consciously pitching his voice like a salesman, Hochberg read off the bank’s phone number – (800) 565-3946 – and said, “Operators are standing by now to take your call!”

For more information, call (800) 565-3946 or visit www.exim.gov.


Also On New Pittsburgh Courier:
Red Carpet Rundown: 2016 Oscars
17 photos
comments – add yours