by Cara Eisenpress

Fred Hochberg has won the battle and the war.

The Export Import Bank—Hochberg is its chairman—marched successfully through both the House and the Senate this month, concluding Hochberg’s campaign to elongate the bank’s charter, at least until 2014.

If Hochberg’s operations had not been victorious, the bank would have had to stop guaranteeing foreign loans and providing trade credit insurance to American businesses.

His opponents were mostly small-government groups who wondered whether the government ought to subsidize the exports of private companies, especially large ones. More than two thirds of Ex-Im’s entire budget goes to Boeing to provide guaranteed financing to people in other countries who buy their planes.

But in New York City, the companies who work with the bank are small businesses that have less than $7.5 million in export sales. They use a second export product, insurance to protect their shipments abroad against customers who don’t pay. Ex-Im’s trade credit insurance costs 55 cents for every $100 sent out of the United States.

New York ranks third in exports of all of the U.S. states, and businesses in the state and the city have taken advantage of the bank’s trade insurance to do extra commerce abroad, most often in India, Mexico, and the United Arab Emirates.

And one benefit of the insurance is just that—to allow American companies to expand into unfamiliar markets without worrying about the risks of a financing failure. When Global Export Marketing, a New York City-based export distributor, started working with the bank, its exports could reach new, less secure, countries.

Global Export Marketing acts as the master distributor for American-made goods, managing the exports of products made here. That relieves some manufacturers of the need to develop their own plans for overseas selling.

“We take the financial risk,” said Kevin Egan, the vice president.

The company has been able to export American goods to countries in Africa, places it had never dealt with before using the Export-Import Bank’s products.

“When you go to a regular bank, it’s a lot more difficult to get money,” said Egan. “They’ve helped us grow our export business in certain markets overseas.”

There are private trade insurance companies who offer similar products. But high minimums prevent many small companies from using them. Ex-Im’s trade credit insurance has no deductible.

Originally, the bank, which was founded in 1934, just helped companies reach new markets—like those in Africa. But in today’s competitive global economy, the bank’s loans and insurance keep American exports competitive with products from the emerging economies of China, Brazil and India, and from established countries in Europe.

“In Europe, it is part of the business culture, because domestic markets can’t support domestic companies,” said Bruce Drossman, the export finance manager at the Export-Import Bank’s New York office.

At a moment when economists likewise worry about consumer spending in U.S. domestic markets, strong exports represent a dependable shot for U.S. businesses to grow.

In fact, since the downturn began, more companies have resorted to financing from the bank to increase their exports, according to Loren Yager, managing director of International Affairs and Trade at the U.S. Government Accountability Office.

“A lot of folks turned to Ex-Im that wouldn’t have done so in the past,” he said. “Risks to certain markets means Ex-Im is the only game in town. When the credit markets tightened up, a lot of the alternatives were less suitable. So Ex-Im became quite a popular place.”

In turn, so many exports, with their corresponding profits, have allowed the bank to keep a low balance and even turn a profit.

“The portfolio is extremely diversified,” Drossman said. The Ex-Im bank checks a company’s credit before it offers financing or insurance. “We’re not taking huge risks.”

Not so, say opponents of the bank, who believe endorsing a government agency that takes on risks no private company wants to assume is a troubling position for a nation recovering from a financial crises caused in part by risky loans backed by Fannie Mae and Freddie Mac.

Tom Schatz, president of the Council for Citizens Against Private Waste, one of the groups that had been fighting the bank’s renewal, suggested that diplomacy—asking China not to subsidize its exports—would be a better solution.

“When Boeing is getting a huge amount of money out of the bank, it seems like this is something they could do privately,” said Schatz.

Since 2007, the bank has supported over $29 billion in loans to Boeing, the aerospace company based in Washington. Global Export Marketing, the company in New York that works with Ex-Im, got financing for about $3.7 million of sales. That amounts to slightly more than 1 percent of Boeing’s loans.

Yet for smaller exporters in New York City, the dollar amount means more than a comparison with Boeing would suggest.

If the reauthorization bill had gotten stuck in the House, Egan, Global Export Marketing’s vice president, said he would have had to cut back on the size and breadth of exports.

“We’re in this business for 40 years,” he said. Losing the bank’s help “would hurt us, for sure.”