Bond or bank guaranty on our behalf
This is because our private bank, Wells Fargo, requires us to obtain an Ex-Im guarantee in addition to our corporate and personal guarantees before they will issue a performance bond or bank guaranty on our behalf. International trade finance is more complex than domestic deals and requires letters of credit. For small businesses that do large, long-term deals like ours, Ex-Im working capital guarantees are essential to make these letters of credit affordable.
Critics of Ex-Im say that the private market will step in and take over, but that is just not the case. I already work with Wells Fargo and without Ex-Im, I will not be able to export. This is because private banks will not collateralize loans against works-in-progress or foreign receivables, and letters of credit require 100 percent collateral. Small businesses like ours can only make these deals possible with Ex-Im.
If Ex-Im’s opponents have their way and the bank is not reauthorized, I will lose export sales and I would have to reduce my workforce. Nearly 65 percent of ProGauge Technologies sales are exports, and all of that revenue will evaporate with Ex-Im. Translated into jobs, that could be 50 to 60 people I will have to cut for no good reason. Others in Bakersfield and across California will be forced to do the same.
Since 2007, Ex-Im-related transactions supported more than 1,300 jobs in or around the Bakersfield metro area. In California, Ex-Im supported more than 130,000 jobs at 948 different companies. This support fueled $211 million of exports in our region and nearly $21 billion of exports throughout the state.