May 18, 2024

Corporate Nex Hub

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How Exporting Makes Women-Owned Businesses Stronger, More Sustainable

5 min read

“I think our Secretary of State said it best, economic security is national security,” Judith Pryor, Vice Chair and First Vice President of the Export Import Bank of the U.S. (EXIM Bank) said in an exclusive interview on Electric Ladies Podcast recently. It is also a key lesson of the pandemic economic crisis.

“I will tell you that it was the retired generals, the retired military brass, that would come in and go up to The Hill and talk to Congress about the importance of the economic development agencies like EXIM, like OPIC, even U-S-A-I-D ,because they said, ‘we want to get out and when we leave, if no one’s coming in behind us, right, it’s going to be chaos,’” Pryor explained.

She would know, because she has been in international business for about 30 years. Before being appointed to the EXIM Bank leadership, she had a long career in the telecommunications – satellites sector, and then spent many years at what is now the US International Development Finance Corporation (formerly the Overseas Private Investment Corporation or OPIC).

EXIM Bank, a small, 90-year old agency founded by President Franklin D. Roosevelt, is one of various government levers fostering cross-border collaboration for U.S. businesses and non-governmental organizations. There’s also the U.S. Trade Representative (USTR) based in the White House, and the Commerce Department has the International Trade Administration. Interestingly, in the Biden Administration, the top people in these posts are all women. Along with Pryor, Reta Jo Lewis is Chair of EXIM Bank; Katherine Tai is USTR, Gina Raimondo is Secretary of Commerce, Marisa Lago is Under Secretary of Commerce for International Trade, and Diane Farrell is Deputy Under Secretary for International Trade.

Statistica reports that, as of 2021, exports are 10% of the U.S. economy, about $3 trillion, and imports are about 4.5% of the U.S. economy.

How can businesses find international partners and financing?

International deals can be risky, complicated, and lucrative. They can evolve either from networking or from deliberating seeking them out. Entrepreneurs might meet someone who needs their product at a conference, for example, or, they can identify key markets for their product in other countries.

The U.S. Trade Representative and the International Trade Administration can help facilitate certain aspects of exporting; and EXIM Bank can help facilitate the deal structure and financing, reducing the risks.

“We help anyone in the United States who wants to sell their goods or services overseas through short, medium, and long-term financing tools for international buyers. It’s usually medium term and long term,” Pryor said, adding, “Our goal, frankly, is to facilitate U.S. jobs through exports to help level the playing fields so that U.S. businesses can compete fairly.”

Facilitating payments and reducing risk

“Let’s say I live in Spain, and I was in the United States six months ago, and there was this product that I just loved, and I want to import it and sell it in my boutique chain that I have throughout Spain. I don’t want to pay until I get the product. The exporter in the United States says, well, I don’t want to export until I know I’m going to get paid. So, you’re kind of in this conundrum of everybody wants their money or their product at the same time, and we can help there.” That’s an export scenario that Pryor painted.

“That’s exactly how EXIM can step in and help a short-term exporter, 30, 60, 90 days usually, protect them and take the risk out of exporting for them. So, that’s just an example for a small business of how we can be very useful. And we do thousands and thousands of these transactions every year.”

EXIM Bank can help structure the export deal, secure the financing and at competitive rates, and facilitate the payments. “We provide foreign buyers with the ability to purchase U.S. goods and services. So, we’re debt financiers to buyers of American goods and services,” Pryor explained. “On the flip side of that, and more often with small businesses than not, we provide export credit insurance, which is short term, 30, 60, 90 days to ensure payment of goods received.”

EXIM Bank earns fees off the deals it facilitates, but the revenue goes back to the U.S. Treasury. They report having returned about $10 billion to the Treasury so far, reducing the national debt.

Renewable energy is a priority

Clean energy is high on their agenda, Pryor stressed, and even in their Congressional Charter. “Renewables are a priority, not only because we’ve made it so, but Congress also through our reauthorization increase it’s been a priority.”

She added that, “Environmentally beneficial support for exports has been in our charter since 1997,” even to the point that they are required “to designate a person at the bank to focus solely on this.”

The export deal flow for renewables has been slow, Pryor pointed out, because of 85% U.S. content requirements for these projects, Pryor explained, but they lowered that threshold recently to 51% to advance more deals.

Women-owned businesses that export perform better financially than those that don’t, Pryor said.

The Census Bureau reports there are 12.4 million women owned businesses in the U.S., “with $2.2 trillion in receipts.” However, only 15% of them are exporting, according to the Commerce Department in January 2024.

“If you are a woman and you own a business, if you export, you provide better wages to your staff, you’re more likely to weather a financial storm or downturn like a pandemic, say, than companies that do not export,” Pryor emphasized. “And data shows, as we all know, that women -owned firms perform 34% better on return on investment. It’s 34% higher than those businesses that are run by men. So, there are a number of legitimate bottom line reasons why I want to see more women exporting.”

EXIM Bank offers specialty programs for women-, minority- and veteran-owned businesses. The Commerce Department announced programs in January 2024 specifically to boost the exporting opportunities for U.S. women-owned businesses, as well as for other diverse entrepreneurs.

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