Past government administrations have made it a priority to help rural American companies, manufacturers and agricultural farmers increase their exports through the use of resources, expertise, counseling and programs. An example of this is the "Made In Rural America" inititave, which began in 2014. Participation from the Department of Commerce, the Department of Agriculture, the Small Business Administration, the Export-Import Bank of the U.S (EXIM), the Office of the U.S. Trade Representative and the U.S. Postal Service have all been involved in providing export assistance, especially during the last recession when rural companies began selling abroad for the first time in order to find ways to expand. As a result, these companies were able to retain or create jobs through their export sales while spreading the risk to more markets than one.
Not only does EXIM support rural businesses involved in exporting, but we also understand the act of exporting helps build positive economic development for many rural communities across the country. According to a FedEx national survey, “65% of small businesses that trade said their revenue is increasing versus 46% that do not trade.” Below are four reasons why exporting is a form of rural economic development:
- Businesses can grow through exporting (particularly when there is a downturn in the domestic economy);
- Businesses that expand tend to hire more employees to keep up with rapid growth;
- Businesses that increase sales through exporting will need to grow their physical plant and equipment to fulfill orders; and
- Often businesses will lease land at the local business parks or port properties or Foreign Trade Zones (which the Rural Economic Development Specialists owns and/or manages)
Many sectors of the economy such as manufacturing or service providers depend on trade. An “estimated 25% of all manufacturing jobs are supported by exports", but the agricultural sector is just as important because it continues to be a main staple of our U.S. economy. According to the US Department of Agriculture “U.S. agricultural exports alone supported more than one million American jobs both on and off the farm, a substantial part of the estimated 11.5 million jobs supported by exports all across our country.” About one of every three acres on America’s farms is planted for export, which identifies how important it is for farmers to export in order to remain financially strong.
How EXIM Can Support Rural Exporters
EXIM currently has export finance products aimed at helping rural exporters double their sales. These include Export Credit Insurance allowing rural exporters to safely extend credit terms to their foreign buyers by insuring against nonpayment risks for commercial or political reasons. Plus, receivables covered by export credit insurance can be added to a company’s borrowing base. In addition to export credit insurance, EXIM provides Working Capital Loan Guarantees to help companies obtain the funds needed to build export-related products and services. To find out more about how we can support your rural exports, request a consultation with one or our specialists below: