The 2017 EXIM Bank Annual Report includes success stories on small businesses that have rehired workers, added jobs and are exporting worldwide with EXIM’s help and support. Here are two examples.
A small business, Classic American Hardwoods Inc. (CAH) in Memphis, Tennessee, exemplifies EXIM’s mission of supporting and creating jobs through exports. When CAH began exporting lumber in 2007, the U.S. housing real estate market began to collapse, and lumber businesses were closing. To survive, the company had to break into new markets in Europe and Asia, but entering those markets and regenerating the lost revenue was daunting. Like most small businesses, CAH maintains cash flow through asset-based lending, a revolving line of credit secured to the lender by the borrower’s inventory and assets. CAH’s lender, First Tennessee Bank, agreed to make the company’s foreign receivables eligible if they were insured against credit loss.
CAH began purchasing private export credit insurance in 2007, and exports boomed. Then the 2008 financial crisis hit hard. The insurer, wary of international risk, canceled CAH’s policy at a time when exports comprised 60 percent of total sales. The owner was forced to lay off half of the company’s 120 employees, and those remaining had to take a pay cut. Enter EXIM. Insurance broker World Trade Consult LLC led CAH to purchase EXIM’s export credit insurance to cover its foreign receivables.
Ten years later, CAH has increased revenue by 67 percent, with 100 percent of the increase due to exports that now reach customers in 27 countries in Europe, North America, Asia, Africa, and Oceania. Over this 10-year period, the company topped $150 million in sales insured by EXIM with not a single dollar of credit loss. As a result, CAH has been able to rehire 60 workers and add an additional 15 jobs.
For more than 30 years, Thrustmaster of Texas Inc. has been designing and manufacturing high-quality marine thrusters — propulsion devices for all types of ships and floating platforms. With the support of EXIM working capital guarantees, this Houston-based small business has become a leading supplier of thrusters, serving customers all over the world, particularly in Korea, Singapore, China, and India.
To fulfill its export sales orders and maintain cash flow, Thrustmaster benefits from EXIM working capital guarantees of a multimillion-dollar line of credit from its lender, Amegy Bank of Texas, a division of ZB, National Association (formerly Zions First National Bank). Thrustmaster uses the EXIM-guaranteed working capital primarily to cover repayment guarantees and performance bonds required by their customers. This capacity has enabled the 230-employee company to compete internationally against much larger multinational firms. Since Thrustmaster began using EXIM’s working capital guarantees 10 years ago, the company has been able to increase revenue and sustain and create jobs, adding 20 new positions in 2011 after receiving a $30 million working capital guarantee from Amegy Bank.
Between 2012 and 2017, EXIM’s working capital guarantees have helped the company maintain steady growth in spite of the economic downturn of the oil and gas industries, the sectors of its principal customers. In the past five years, EXIM has supported more than $83 million of Thrustmaster’s exports.
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