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Main Street awaits fate of Ex-Im Bank, key lender

Mary Howe, president of Howe Corp. in Chicago, relies on the Export-Import Bank of the United States for credit insurance.
Lawrence Collins
Mary Howe, president of Howe Corp. in Chicago, relies on the Export-Import Bank of the United States for credit insurance.

The fate of the Export-Import Bank of the United States, a key lender for many small companies that do business overseas, again hangs in the balance.

The bank's fund runs out Sept. 30. While the bank's charter technically expired June 30, it continues to service loans with terms of up to 18 years. Adding to the drama, the U.S. government could potentially shutdown Oct. 1 if a budget agreement is not reached. However, the bank's reauthorization is not directly tied to the federal budget process.

Known as "Ex-Im" for short, the bank is a financial lifeline and safety net for many small businesses that export goods in foreign markets than can be risky. The bank provides loans and insurance to support exports. President Barack Obama has been a vocal supporter of renewing Ex-Im's funding, calling the move a "no brainer" over the summer.

For small business owners such as Mary Howe, the potential closure could reduce her access to working capital. Howe's family business, Howe Corp. in Chicago, exports up to 40 percent of its industrial refrigeration equipment to places including Central America and Canada.

And if the Ex-Im Bank's funding isn't renewed? "Our backup plan is to self-fund; it's going to get tight," Howe said.

Read MoreBattle lines drawn over Export-Import Bank renewal

The Senate voted in July to fund Ex-Im as part of a longer-term highway bill, which has since moved to the House for consideration.

The vote in the U.S. Senate on the bill was a strong signal of bipartisan support for the Ex-Im bank and "businesses and workers that we have empowered in the past to grow their exports," the bank's Chairman Fred P. Hochberg said in an email statement to CNBC. Ex-Im Bank has been funded for some 80 years.

Since Ex-Im's charter expired in June, it has not been able to make or guarantee any new loans, or extend insurance, partly due to congressional disagreement over who receives funding from the bank. The financial institution did $20.5 billion in financing last year.

Ex-Im Bank's small-business authorizations in fiscal year 2014 were more than $5 billion, as measured by total dollar volume, which is nearly 25 percent of the total-dollar volume of overall authorizations.

The bank approved more than 3,300 small-business authorizations, nearly 90 percent of the total number of Ex-Im Bank authorizations.

The remaining $15.5 billion supports exports at other big corporations—including General Electric, which announced last week it would move about 500 U.S. jobs overseas to avoid losing business to foreign competitors, due to uncertainty about the bank's charter. GE says 400 of the 500 positions will now be based at its facility in France, dependent on the company's winning bids. The additional 100 jobs currently are in Texas, but will move to Hungary and China.

"Our customers rely on export credit agencies, like U.S. Ex-Im, to finance their critical power projects," said Jeff Connelly, vice president of supply chain at GE Power & Water, in prepared remarks.

But critics, including House Financial Services Committee Chair Jeb Hensarling, Republican of Texas, see the bank as a form of corporate welfare. "Most of this goes to very successful, well-heeled companies that don't need the help in the first place," Hensarling told CNBC over the summer.

Export-Import bank
Andrew Harrer | Bloomberg | Getty Images

Still, the future of the bank is a "huge issue" for small companies, according to Morrison Textile Machinery Co. in Fort Lawn, South Carolina. President Jay White says Ex-Im allows the company, which designs, manufactures and installs textile machinery globally, to insure its overseas business on a rolling basis.

"If I can't get Ex-Im insurance, I am taking on credit risk myself—the profit on my job would be eaten up if I get commercial credit insurance," White says. "This overseas credit support is very important to my business," he says.

And while Ex-Im Bank's charter technically has expired, it will remain operational through the end of the month and continues to service existing loans. The bank's funding lapse coincides with a potential government shutdown if a congressional continuing resolution is not passed to keep the government operational.

Read MoreEntrepreneuers who do biz overseas await bank's future