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HSBC Boosts International Loan Program to $5B

HSBC Boosts International Loan Program to $5B

New York, NYHSBC Bank USA is adding $3 billion more to its international loan program, raising the program’s total funding to $5 billion, as “the demand by US small and medium size businesses looking to export or expand internationally continues to rise.”

The funding increase is the third in 15 months and will “satisfy the demand by companies who want financing to grow and compete,” said Steve Bottomley, group general manager, senior executive vice president and head of Commercial Banking for HSBC in North America.

In 2013, US exports hit an all-time record of $2.3 trillion and supported 11.3 million US jobs, directly and indirectly, according to data supplied by the US International Trade Administration.

The latest HSBC Global Connections Trade report shows that developing economies, such as China and India, present the best US trade prospects, with US export growth to average nine percent a year to each country through 2030.

Additionally, global trade is expected to grow annually by eight percent beginning in 2016 from 2.5 percent in 2013, as businesses capitalize on the rise of the emerging market consumer and developing markets stabilize their productivity levels for the future.

“US small- and medium-size businesses are key contributors to US exports and domestic job growth,” said Derrick Ragland, HSBC executive vice president and head of US Middle Market Corporate Banking.

HSBC launched its international loan program for US small and medium size businesses seeking to export or expand internationally in July 2013with $1 billion in funding.

It doubled the program to $2 billion at the start of 2014, and today’s addition of $3 billion more raises the program’s total funding to $5 billion.

The international loan program is available to businesses with at least $3 million to $500 million in annual revenue, and who are focused on cross border trading or global expansion.

Only applications for new business loans will be accepted and all of HSBC’s usual credit and lending criteria apply. The program runs through December 2015.

International trade and financing, said Bottomley, “is critical not only for U.S. companies who want to excel, but also for the wider US economy.”

Since launching the program last year, “We’ve been impressed by the pace with which businesses around the country and across industries have taken advantage of the program to capture international growth market opportunities.”


EXIM Defends Itself Against Defunding Campaign

Washington, DC – With talk of defunding its operations circulating on Capitol Hill, the US Export-Import Bank (EXIM) has released its latest Annual Competiveness Report to Congress in an effort to “underscore the need for continued EXIM support for American exporters to help level the playing field in an increasingly competitive global marketplace.”

According to the report, while for decades, global export competition was governed by international standards put in place to ensure that companies could compete on free-market factors like price and quality rather than on aggressive government financing, today the global marketplace is changing.

“While 100 percent of official support for trade operated under these international rules 15 years ago, today that number has plummeted to 34 percent. Currently Russia, China and other countries offer subsidies and financing terms – including support of their state-sponsored companies – that threaten American jobs and export opportunities,” it said.

The report also stated that “the rapid growth of export financing from three Asian competitors: Korea, Japan and China.”

Those countries, it added, “provided significantly more export-credit support to their respective domestic companies and industries than did the United States in 2013.”

“Unregulated Competition is Expanding”

In addition, the report asserts that unregulated competition is expanding and commercial banks have largely withdrawn from pockets of the export-finance arena, including providing support for small businesses.

“The United States faces more robust competition from export-credit agencies offering terms that are not regulated by the Organization for Economic Co-operation and Development (OECD), which encourages global export competition based on free-market principles and mutually agreed-upon standards,” it said.

For example, EXIM support for all of its $15 billion in medium- and long-term financing was regulated by the OECD Arrangement, but other OECD member countries offered more than $60 billion alone of unregulated export financing support (on top of $83 billion in export financing governed by the OECD Arrangement).

“Nations that are not subject to the OECD framework, including Brazil, Russia, India and China, provided $115 billion in trade-related financing,” according to the study.

Unregulated support, it said, totaled substantially more than all OECD-regulated support, “a trend the report expects to continue and one which is poised to place US exporters at a competitive disadvantage absent the tools made available by EXIM.”

The report also stated that “the appetite of commercial banks for long-term projects continued to diminish” since the implementation of Basel III and other banking reforms.

“As liquidity sources for certain projects remain scarce, export-credit agency support has become more necessary to fill gaps in the trade finance marketplace and ensure that American exporters remain competitive,” it said.

“Consequently, US exporters will continue to rely upon EXIM support as they seek to take advantage of emerging economies and the 95 percent of consumers that live abroad.”

In the statement accompanying the report, EXIM Chairman and President Fred P. Hochberg, said, “There is no stronger brand in the world than ‘Made in America,’ but the increasingly aggressive approach by some foreign competitors in the export financing marketplace presents an ever-growing threat to US jobs.”

The bank’s job, he said, “is to back American workers and ensure that US exporters, especially small businesses, remain competitive and have the support they need to export their products and create jobs here at home.”