GOP may hate the export-import bank, but Minnesota small businesses love it
The town of Princeton, Minnesota, is tiny, holding fewer than 5,000 people. But head to its southwest corner, a few blocks north of the town's auto shop and welder, and you'll find U.S. Distilled Products. From this tiny town, the company churns out all sorts of alcohol: bourbon, brandy, gin. Nearly everything a bar owner could ask for.
These are products that go around the world, to dealers in places like China and Australia. But to get them there, and to convince new foreign buyers to really jump in, the company sometimes needs a little help. So it often turns to the government, and in particular, a program called the export-import bank.
The bank helps to provide loans and lines of credit to foreign companies so they can purchase products from American groups. The deals are largely aimed at small to midsize businesses like U.S. Distilled Products, and the credit that the program can offer to the company's potential buyers makes pulling off deals easier.
"I would say it's huge from a sales side. Especially when you're starting with a new brand. For them, putting up all that cash is difficult," says Patricia Pelzer, the CFO of the company. "So giving them that open account allows them to generate that cash."
But the program could also be threatened soon. Bills reauthorizing the bank used to fly right through Congress. But many Republicans have made it their mission to see it end at the end of September, when it has to be reauthorized by Congress.
In Minnesota, the attacks started as early as May, when GOP Senate candidate Mike McFadden posted about it on the "waste of the week" section of his campaign website, complaining that too much of the bank's funds just went toward helping out big companies, while the private sector could do a better job.
"This type of corporate welfare has to stop," the site reads. "The government should not be picking winners and losers based on who has the best lobbyists."
In June, it was Michele Bachmann's turn. At a House hearing looking at the bank, Bachmann spoke out against it, saying the program got in the way of a free market.
"I want to stand on record," she said. "I oppose the continuation of this bank because reform hasn't worked, and we've been ignored."
The points line right up with conservative principles. But it's tough to argue that the program's loans haven't helped Minnesota. Since 2010, the bank has helped to export more than $2 billion of goods from Minnesota businesses. And of the 171 companies that it helped, 110 were small businesses.
Pelzer says that since her company started going to the bank to help guarantee loans, it's seen an increase in sales of nearly 10 to 20 percent. And for companies like hers, having that extra bit of credit available can mean the difference between a guaranteed sale and a pass. Even as the program gets threatened, it's never been about politics for them. It's simply good business.