The US Export-Import Bank has announced a goal to double financing support for business aircraft and commercial helicopters this year, even as it faces the threat of being shut down after 30 September.
The independent federal agency is known mostly in the aviation industry for financing billions of dollars worth of Boeing sales every year, but it has recently been expanding into business aircraft and helicopters.
As of December 2013, the Ex-Im Bank had provided $1 billion to support exports for manufacturers such as Beechcraft, Gulfstream and Sikorsky. It has already authorised loans for another $740 million in sales so far this year, and now plans to reach $2 billion by the end of the year.
The Ex-Im Bank’s broadening reach in the US aviation industry comes as a powerful faction in Congress works to strip the agency of its legal power to authorise such loans by the end of the fiscal year.
Last week, Representative Jeb Hensarling, a Texas Republican and chairman of the House Financial Services Committee, said in a speech that the demise of the Ex-Im Bank this year is a “defining issue for our party and our movement” this year.
The Ex-Im Bank survived similar calls in 2012, when a majority in Congress voted to reauthorise the bank to finance US exports for three more years. That authorization expires on 30 September, allowing the bank’s opponents another opportunity to seek its closure.
Hensarling criticizes the government-run bank for meddling in a financing sector that he believes should be reserved for the free market. Government intrusion, Hensarling argues, leads to “crony capitalism” benefiting large corporations at the expense of what he calls the “Main Street economy”.
The Ex-Im Bank says it exists to provide financing for exports where there are gaps in the marketplace at no net cost to taxpayers, as the agency returns a surplus to the US Treasury each year.
In an interview at EBACE, Gulfstream chief executive Larry Flynn expressed strong support for the Ex-Im Bank’s support. The agency’s loans were pivotal, for example, in a recent sale of a jet to a customer in Africa, he says. The Ex-Im Bank not only provided back-stop financing to secure the deal, it helped local banks in Africa understand the private aircraft financing market, he says.