A growing enterprise in Wilmington was featured in an article
in Monday’s The New York Times illustrating the role played by the Export-Import Bank, a government-run export financing agency.
Sister companies Dry Corp and Dry Case are typical of the many U.S. small business exporters that rely on the Ex-Im Bank for loan guarantees and insurance against loss when a foreign deal goes bad.
Ex-Im’s programs lessen the risk involved in shipping abroad, and both Dry Corp and Dry Case have used them for the past three years or so, said the sister companies’ COO Corey Heim in a telephone interview Wednesday. He was quoted in Monday’s article as saying that, when doing business in the U.S., a company can hire a collection agency to go after non-paying customers.
“But when we’re talking about overseas, if something happens politically, if there’s a war, or the company goes out of business, or any kind of risk factor, we can still get paid with Ex-Im,” he was quoted as saying in the story.
A creation of the Franklin D. Roosevelt administration in 1934, the Ex-Im Bank has been credited for helping businesses overcome financial obstacles to foreign sales. The beneficiaries have been big businesses – Boeing is a customer – as well as small businesses like Dry Corp/Dry Case, which employs 21 and sells about $1 million of its waterproof protective products annually.
Currently, however, the Ex-Im’s charter is set to expire this September unless Congress votes to renew it. There has been heated debate, especially in the U.S. House of Representatives, about the bank’s true value as the deadline nears, with some legislators labeling the bank’s loan guarantees and insurance program as examples of corporate welfare.
Heim and his employer are big fans of the bank, and he thinks that the companies' use of both Ex-Im programs made them attractive to the New York Times reporter for his story. The companies were referred to the reporter through the Wilmington office of the Small Business and Technology Development Center.
The sister companies have used the loan program as a way to extend credit terms to their foreign customers, so Dry Corp and Dry Case don’t have to demand up-front payment, which new customers are often unwilling to risk when they don’t know if their new supplier will come through with the goods.
“The Ex-Im Bank’s credit guarantee helps us build relationships,” Heim said Wednesday. “We sell to customers in more than 40 countries all over the world.”
The bank’s other program – export insurance – cushions a U.S. exporter against loss. And Dry Corp/Dry Case has needed that, too. In early 2013, an Australian company bought about $10,000 worth of the companies’ merchandise. Soon after, the Wilmington enterprise learned the Australian customer had gone out of business, and there was apparently no way of getting payment for their goods.
Because Dry Corp/Dry Case had purchased export insurance, Heim said, the companies got about 95 percent of their money back.
Watch for a related story in the July 18 print issue of the Greater Wilmington Business Journal.