Alex Christensen had just started to build his business in 2008 when the Great Recession took hold and the U.S. economy took its biggest dive in generations. The Floridian had recently received his license as a general contractor, but opening a construction business just as the state’s housing market was cratering obviously wasn’t going to work out.
Through a family connection, he began buying feed for horses from farms around the country and selling it to a local buyer in Florida. Working with his father, he opened up a small retail business selling feed and bedding. The business was profitable but grew slowly. Meanwhile, Christensen worked as a bartender and took various jobs at different farms — some as far away as Canada — in order to make ends meet.
While he was working in Canada, he got a phone call that would set the business on a much faster growth path. The management of a Venezuelan stable called and asked about pricing for feed. Christensen found that he could provide both feed and bedding to overseas customers at competitive prices.
His small firm, working to manage orders from overseas clients, turned to the Export-Import Bank of the United States for support. The bank, designed to provide working capital loans to U.S. businesses operating overseas as well as low-cost financing to foreign buyers of American goods, was able to facilitate transactions that Christensen said his company would have struggled to complete otherwise.
In an interview, Christensen said that hs company, Southeast Hay Distributors, relies on the Ex-Im Bank for all of its international business.
The bank, however, is under severe pressure from Republican members of Congress who view it as a corporate welfare program that primarily helps big businesses, like airplane manufacturer Boeing. A deal announced this week would extend the bank’s charter for six months after it expires at yearend, but GOP House members have made it clear that their plan is to kill the agency off completely.
The prospect of that happening alarms many owners of small businesses, including Christensen.
Nearly 30 percent of his company’s revenues came from overseas sales last year. That figure will rise to almost 40 percent this year, including a major contract with the United Arab Emirates that will be cancelled if the bank’s charter is not renewed.
In a letter sent to every member of Florida’s Congressional delegation, Christensen wrote, “If re-authorization of the Bank fails, shipments to the UAE will stop Tuesday, October 1. Our small family business (that we have funded ourselves) will lose about $1,200,000, or about 40% of our total expected revenue (not profit) for this fiscal year.”
Christensen, who employs seven people full-time and takes on additional seasonal help, said that the impact of the closure of the Ex-Im Bank would go beyond his family’s company. “Our wood shavings supplier is in a small rural town in southern Georgia,” he said. “We’ll probably be sending them $750,000 to $850,000 this year,” with much of those sales backed by Ex-Im loans.
“The most important thing to focus on isn’t the impact the Ex-Im policy has had on us but on our suppliers,” Christensen said. “These sales are critical to the economy, especially in these areas where we are pulling product from. It’s coming from small rural communities.”
He said that so far his outreach efforts to Congress have resulted in “generic” responses from Florida’s delegation. But he said he remains optimistic.
“I hope our voice is heard,” he said.
Top Reads from The Fiscal Times: