Interviews
Financing options play key role in manufacturing industry, NCTO
21 Oct '09
2 min read
Testifying before the U.S. House Small Business Committee, NCTO President Cass Johnson urged committee members to expand Small Business Administration (SBA) loan programs to aid manufacturers in gaining access to credit, working capital and loan guarantees to produce products for export. Johnson explained that financing options play a pivotal role in the textile industry's ability to manufacture products and export to customers outside the United States. The U.S. textile industry, for example, is the world's third largest exporter of textile products, exporting over $16 billion in goods to other nations in 2008.
Johnson noted that Asian governments have been quick to expand export financing guarantees during the financial crisis while U.S. government institutions, banks and insurers have withdrawn credit from the $25 billion Western Hemisphere textile and apparel trade sector. Johnson noted that NCTO member companies cited the withdrawal of credit and guarantees as a principal reason for the 24 percent decline in U.S. textile exports to the region.
Johnson noted that the SBA, Office of Advocacy estimates that small businesses are responsible for over 97 percent of all U.S. exports. Currently the SBA has a 7(a) loan program called the Export Working Capital Program (EWCP) that provides export financing to small businesses. NCTO recommended that the Small Business Committee make modifications to the loan program so that small and medium manufacturers are able to benefit.
NCTO urged the committee to modify the EWCP by increasing the loan limitations and the required size standards associated with the program. NCTO recommended that the EWCP be modified to offer three loan amounts: $5, $10, and $15 million and increase the size standard to 1,250 employees or less. Johnson testified that these modifications will serve as an effective mechanism to finance exports for small and medium manufacturers and automatically create new opportunities for exports. In addition, Johnson encouraged the committee to work with Ex-Im bank to ensure that Ex-Im continues to offer flexible financing options for all businesses to ensure international markets remain open to receive U.S. produced goods.
Johnson noted that Asian governments have been quick to expand export financing guarantees during the financial crisis while U.S. government institutions, banks and insurers have withdrawn credit from the $25 billion Western Hemisphere textile and apparel trade sector. Johnson noted that NCTO member companies cited the withdrawal of credit and guarantees as a principal reason for the 24 percent decline in U.S. textile exports to the region.
Johnson noted that the SBA, Office of Advocacy estimates that small businesses are responsible for over 97 percent of all U.S. exports. Currently the SBA has a 7(a) loan program called the Export Working Capital Program (EWCP) that provides export financing to small businesses. NCTO recommended that the Small Business Committee make modifications to the loan program so that small and medium manufacturers are able to benefit.
NCTO urged the committee to modify the EWCP by increasing the loan limitations and the required size standards associated with the program. NCTO recommended that the EWCP be modified to offer three loan amounts: $5, $10, and $15 million and increase the size standard to 1,250 employees or less. Johnson testified that these modifications will serve as an effective mechanism to finance exports for small and medium manufacturers and automatically create new opportunities for exports. In addition, Johnson encouraged the committee to work with Ex-Im bank to ensure that Ex-Im continues to offer flexible financing options for all businesses to ensure international markets remain open to receive U.S. produced goods.
National Council of Textile Organizations
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