When John Fornazor started his business in 1987, he had four employees. Now, in 2017, his company, Fornazor International Inc., has around 100 employees. He says it exports to countries around the world – from Saudi Arabia to Indonesia and the Philippines.
“We went from 75 containers our first year to 30,000 last year,” Fornazer said.
He credits that growth to the Export-Import Bank (EXIM) of the U.S.
“Small businesses have a really tough time getting bank credit, selling overseas, so EXIM is there to support them if they need it.” Hochberg explains the bank “provides loans, guarantees to insurance companies, most of them small businesses so they can export and create more jobs at home.”
Some have argued small companies are disadvantaged by it, and there have been efforts to get rid of the bank as a whole. Presidential candidate, Donald Trump was not sure if he supported the Export-Import Bank calling it unnecessary on the trail. Now as President, he is reconsidering his earlier position.
Hochberg says, for over two years, they have not had a board and as a result they can’t approve any transactions over $10 million. So, although the bank can operate and do small loans, he says it can’t do the full range of transactions.
“So it’s really hobbled the bank, it’s really made it very difficult for companies here in New Jersey, small businesses to export and create more jobs. So I’m pleased President Trump has rethought it,” Hochberg said.
In an effort to keep the Export-Import Bank alive and at the forefront of the conversation, Rep. Josh Gottheimer organized a round table discussion.
“We need growth in the state of New Jersey, we need to keep jobs here and get new jobs. It’s one of those things where it’s a great return on investment for New Jersey for our tax payer dollars where we make money and I just don’t understand why people wouldn’t support this,” Gottheimer, who represents the fifth congressional district in New Jersey, said.
Gathered at the table were companies who use the bank, but many businesses just wanted to learn about ways to join and to see if it was the right fit.
Among the questions asked were: How do you apply? Businesses were told to talk to an insurance broker or go to the bank directly. How do you qualify? The bank looks at customers on the export side and you need to be in business about three years. One business owner at the round table explained that the Export-Import Bank isn’t for him.
Aaron Levy, the CEO of Technology Dynamics, says he does believe the Export-Import Bank is a fantastic tool, but he says not everyone can benefit from it. For example, since his company does defense work, it wouldn’t qualify. Still, even if they did, he says at this stage he wouldn’t use it.
“At the scale I’m in now, which is small scale on the $20 million, we can do it on our own pretty good. Our customers pay us in advance or by letters of credit so we’re not taking much risk.” he said.
But, if there was more risk involved in his company, he says the bank would give him needed coverage.
So, whether you’re a businessman like Levy who doesn’t think the bank would benefit him right now – or you’re a company like Fornazor, who says the bank changed his business for the better, the question is whether this program will even still exist.
“It took us from a small business to one of the top shippers in the country, so I really don’t see how it can hurt,” Fornazor said. At this point, President Trump has named two people, but the bank’s ex-chairman says they still need a corum of three, the board is five, and those names have yet to go to the Hill.
At this point, President Trump has named two people, one of whom is Gottheimer’s predecessor in the House, Scott Garrett, a strong critic of the bank. The bank’s ex-chairman says they still need a quorum of three of the five total members of board. These names have yet to go to the hill.
“I’m hopeful the President will name a board that will be supportive of U.S. companies and supportive of U.S. workers so we can compete overseas,” Hochberg said.