Japanese Bank Assists Small New York Exporting Firms
NEW YORK (AP) _ A Japanese bank will help the state’s small export businesses by offering leveraged loans under an unusual agreement.
″This kind of innovative approach to stimulating exports is a significant step in the effort to reduce this country’s $100 billion trade deficit, of which almost 50 percent is with Japan,″ said Stephen Berger, executive director of the Port Authority of New York and New Jersey.
Under the agreement announced Wednesday, the state’s Job Development Authority will deposit $250,000 into a Daiwa Bank interest-earning cash collateral account that leverages or increases the deposit at a four-to-one ratio.
The resulting $1 million will be available for loans to small-to medium- sized New York state export businesses. The program will be administered by XPORT, the Port Authority’s trading company and the first publicly owned international trading company in the nation.
The Job Development Authority, which now will have $2.5 million available for loans, had been running out of money to lend to exporters who were unable to get financing from regular banks.
The director of XPORT, Herbert Ouida, said the program is significant for the Japanese because it should help alleviate some of the ill will felt toward Japan because of the trade deficit.
″We believe this unique export financing program will make great progress in addressing the current trade deficit that exists between the United States and Japan,″ said Nobuyuki Kobayashi, executive vice president of Daiwa Bank.
″As a Japanese bank, we are happy to participate in a program that may help to reduce the trade imbalance.″
The increased money will be available to firms employing fewer than 100 people and having annual sales of $10 million or less.