I raised a serious financing issue last year ... yet you never responded (nor fixed the problem).
by MichaelWade, Window Shopper
- Created: May 27, 2011, 3:09 am
Newport Beach, California -- May 26, 2011Last year (on September 23rd, 2010) I raised a serious financing issue on your community blog -- a problem affecting many if not most American small businesses. No one has ever responded to my comments ... and nothing whatsoever has been done to fix the problem. I am resubmitting it now in hopes that something good will result. Thank you.=========================================================================================September 2010: What successes and challenges have you experien
September 23, 2010
TO: U.S. Small Business Administration
Gentlemen, I am responding to your message board request concerning 'September 2010 ... challenges we experience with exporting' because, quite frankly, my ongoing complaint has long been ignored using more traditional means of communication: letters and phone calls. Of course, I understand that I must be somewhat secretive and withhold posting our Company's name and contact information on your so-called online 'community.'
We are an export management company, founded in 1979, selling American-made industrial products into China (and sometimes into other Asian countries). Please understand: all we have been doing every single business day for more than thirty-one years is selling new U.S.-made industrial goods overseas.
We enjoy a very good relationship with your colleagues at the U.S. Department of Commerce. In fact, we were the first Asia specialists in the United States to be granted antitrust protection by the U.S. Departments of Justice and Commerce under the Export Trading Company Act. Furthermore, we rely on Commerce for guidance on export controls matters.
My ongoing complaint is a financial one.... Our customers -- no matter how large the sale -- always eschew Letters of Credit. Ex-Im Bank assistance or factoring receivables are unneeded by us since our customers always pay us within a few weeks after our products clear through China Customs. All we need are a few lines of credit to purchase machinery and cover any unexpected operating expenses. Note: we have ten employees -- most of whom live in China (where they call on our customers).
What irks me is this: for almost thirty years we encountered no difficulty in securing credit lines and business credit cards solely on the strength of our Dun & Bradstreet reports -- 'History: Clear' -- along with our Federal Employer Identification Number ('EIN'). Then, unexpectedly, General Electric Capital cancelled its entire small business 'Productivity Card' program (for all its customers). Afterwards, our other credit providers scaled back their lines of credit or -- just as important to us -- began refusing to increase their credit lines unless business owners like me provide new 'personal guarantees' of repayment. Likewise, your own SBA lending programs have long required 'personal guarantees' before approving loans to small American exporters.
You at the SBA and the other credit granting enterprises are now demanding that I put my own house 'at risk' (as well as the food on my family's table) as a 'personal guarantee' of our long-time business operations in China. In other words, you are demanding that I provide my home to you if, by chance, one of my employees loses his or her credit card somewhere in China. What a terrible thing for you to do when we have been helping Americans keep their jobs in factories in the USA for more than thirty years!
Incidentally, I see nothing in your proposed legislation under consideration by Congress that removes this demand for small business owners to provide a 'personal guarantee' for credit.
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