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Testimony: 

Before the Small Business Committee, House of Representatives: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 10:00 a.m. EST: 

Thursday, January 17, 2008: 

Export Promotion: 

Export-Import Bank Has Met Target for Small Business Financing Share: 

Statement of Loren Yager, Director: 

International Affairs and Trade: 

Ex-Im Small Business: 

GAO-08-419T: 

GAO Highlights: 

Highlights of GAO-08-419T, a testimony to the Committee on Small 
Business, House of Representatives. 

Why GAO Did This Study: 

The Export-Import Bank (Ex-Im) provides loans, loan guarantees, and 
insurance to support U.S. exports. Its level of support for small 
business has been a long-standing issue of congressional interest. In 
2002, Congress increased the proportion of financing Ex-Im must make 
available for small business to 20 percent. In 2006, Congress directed 
Ex-Im to make organizational changes related to small business and to 
better evaluate its small business efforts. 

Figure: Ex-Im's Reported Proportion of Financing Directly Benefiting 
Small Business, Fiscal Years 2000-2007: 

This figure is a line graph showing Ex-Im's reported proportion of 
financing directly benefiting small business between fiscal years 2000 
and 2007. The X axis represents the fiscal year, and the Y axis 
represents the percentage. 

[See PDF for image] 

Source: GAO analysis of Ex-Im data. 

[End of figure] 

This statement discusses (1) trends in Ex-Im’s small business financing 
since fiscal year 2000 and (2) the weaknesses GAO found in the tracking 
and reporting of Ex-Im’s small business financing and the steps Ex-Im 
has taken to address them. This testimony is based primarily on GAO’s 
March 2006 report (GAO-06-351) concerning Ex-Im’s small business 
program. In that report, we recommended that Ex-Im (1) improve the data 
it maintains on its customers with regard to their small business 
status; (2) improve its system for estimating the value and proportion 
of direct small business support for those transactions where the 
exporter is not known at the time of authorization; (3) more accurately 
determine and clearly report the number of transactions that directly 
benefit small business; and (4) have its auditor audit Ex-Im’s 
reporting of its direct support for small business. Ex-Im agreed with 
three of the four recommendations. We discuss the actions Ex-Im has 
taken to implement our suggestions in this statement. 

What GAO Found: 

The share of Ex-Im financing directly benefiting small business has 
increased over recent years, surpassing the required 20 percent in 2006 
and 2007. The percentage increase reflects a slow increase in Ex-Im 
financing for small businesses, while financing for non-small 
businesses was noticeably lower in 2006 and 2007 compared to 2005. Ex-
Im continues to finance most small business transactions through 
insurance or working capital guarantees. 

In our 2006 report, we found weaknesses in Ex-Im’s data and data 
systems for tracking small business financing and made recommendations 
for improvement, and Ex-Im has taken steps to address those weaknesses. 
We reported that while Ex-Im generally classified companies’ small 
business status correctly, weaknesses limited its ability to accurately 
determine small business financing values. For transactions where Ex-Im 
can identify the exporter at the time it authorizes the transaction, we 
found that internal control weaknesses in Ex-Im’s data systems limited 
its ability to accurately determine small business financing amounts 
and share. For transactions where Ex-Im cannot identify the exporter up-
front, we found that weaknesses in its system for estimating small 
business financing also limited its ability to accurately measure and 
report on such financing. We also reported some limitations in Ex-Im’s 
calculation of the number--as opposed to the value—of transactions 
benefiting small business. GAO made four recommendations. Ex-Im has 
taken several steps in response to those recommendations. Most notably, 
Ex-Im replaced its previous data systems with “Ex-Im Online,” an 
interactive, web-based process that allows exporters, brokers, and 
financial institutions to transact with Ex-Im electronically. According 
to Ex-Im, this has resulted in more timely and accurate information on 
Ex-Im’s financing. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-419T]. For more information, contact 
Loren Yager at (202) 512-4347 or YagerL@gao.gov 

[End of section] 

Madam Chairwoman, Ranking Member, and Members of the Committee: 

I am pleased to be here today to discuss the Export-Import Bank of the 
United States' (Ex-Im) small business program. I appreciate the 
opportunity to provide some insights from GAO's work on this issue. As 
you know, since the early 1980s when Congress first directed Ex-Im to 
make available a specified percentage of its export financing for small 
businesses, there has been considerable interest in Ex-Im's support for 
small business. Initially, Congress directed Ex-Im to make 10 percent 
of its financing authority available to small businesses, but increased 
the requirement to 20 percent in the 2002 reauthorization of the bank's 
charter. While Congress did not change the percent required in the 2006 
reauthorization of Ex-Im, it did direct the bank to make organizational 
changes related to its small business financing, and to better evaluate 
its small business efforts. 

As requested, today, I will discuss (1) trends in Ex-Im's small 
business financing since fiscal year 2000 and (2) the weaknesses GAO 
found in the tracking and reporting of Ex-Im's small business financing 
and steps Ex-Im has taken to address them. 

My remarks are based primarily on a report that GAO published in 
2006,[Footnote 1] done at the request of this committee, and analysis 
we conducted to update selected information and follow up on our 
recommendations. For the 2006 report, we analyzed data on Ex-Im 
transactions, examined Ex-Im documentation regarding its small business 
calculations, and interviewed knowledgeable staff.[Footnote 2] The work 
for this statement was conducted in accordance with generally accepted 
government auditing standards. 

I would also note that GAO has work underway that should be of 
particular interest to this committee. Ex-Im's 2006 reauthorization 
legislation requires Ex-Im to develop--and GAO to assess--performance 
standards related to its small business program, including financing 
for businesses owned by disadvantaged individuals and women. GAO is 
specifically addressing the following questions: (1) What performance 
standards has Ex-Im developed? (2) How well do they meet established 
criteria such as tracking progress and providing managers needed 
information to make decisions regarding assistance under the mandate? 
and (3) What steps has Ex-Im taken to implement these standards? We 
look forward to working with the officials at Ex-Im to complete this 
work, and to reporting our findings to Congress later this year. 

Summary: 

The share of Ex-Im financing directly benefiting small business has 
increased over recent years, surpassing the required 20 percent in 2006 
and 2007. The percentage increase reflects a slow increase in Ex-Im 
financing for small businesses. Financing for non-small businesses was 
noticeably lower in 2006 and 2007 compared to 2005. Ex-Im continues to 
finance most small business transactions through insurance or working 
capital guarantees. 

In our 2006 report, we found weaknesses in Ex-Im's data and data 
systems for tracking small business financing and made recommendations 
for improvement, and Ex-Im has taken steps to address those weaknesses. 
We reported that, while Ex-Im generally classified companies' small 
business status correctly, weaknesses in its data and data systems 
limited Ex-Im's ability to accurately determine small business 
financing amounts and share. Ex-Im calculates its small business 
financing amounts by recording the financing value when the exporter 
can be identified at the time of authorization and by estimating the 
financing value when the exporter cannot be identified at 
authorization. For transactions where the exporter can be identified at 
authorization, we found that internal control weaknesses in Ex-Im's 
data systems affected the reliability of Ex-Im's reported small 
business financing value. For transactions where the exporter cannot be 
identified at authorization, we found that weaknesses in Ex-Im's system 
for estimating small business financing also limited Ex-Im's ability to 
accurately measure and report on the amount of small business 
financing. We also reported some limitations in Ex-Im's calculation of 
the number--as opposed to the value--of transactions benefiting small 
business. GAO made four recommendations. Ex-Im has taken several steps 
in response to those recommendations. Most notably, Ex-Im replaced its 
previous data systems with "Ex-Im Online," an interactive, web-based 
process that allows exporters, brokers, and financial institutions to 
transact with Ex-Im electronically. According to Ex-Im, this has 
resulted in more timely and accurate information on Ex-Im's financing. 

Background: 

Established in 1934, Ex-Im operates as an independent agency of the 
U.S. government and is the official export credit agency of the United 
States. In 1983, Congress required Ex-Im to make available for fiscal 
year 1986 and thereafter not less than 10 percent of its aggregate 
loan, guarantee, and insurance authority for financing exports by small 
businesses.[Footnote 3] In 2002, Congress established several new 
requirements for Ex-Im relating to small business, including increasing 
from 10 to 20 percent the proportion of Ex-Im's aggregate loan, 
guarantee, and insurance authority that must be made available for the 
direct benefit of small businesses.[Footnote 4] When reauthorizing the 
bank's charter in 2006, Congress again established new requirements for 
Ex-Im, including a small business division with an office of financing 
for socially and economically disadvantaged small business concerns and 
small business concerns owned by women, designating small business 
specialists in all divisions, creating a small business committee to 
advise the bank president, and defining standards to measure the bank's 
success in financing small business. Ex-Im has taken steps to meet 
these requirements. 

Ex-Im uses the Small Business Administration methodology to determine 
whether a company qualifies as a small business.[Footnote 5] To apply 
this methodology, Ex-Im obtains company information through its 
application process. Ex-Im also subscribes to Dun and Bradstreet, a 
commercial information vendor, which provides information about 
companies, including Standard Industrial Classification (SIC) codes. Ex-
Im uses the SIC codes provided by Dun and Bradstreet to determine a 
company's small business standing by obtaining the corresponding North 
American Industry Classification System (NAICS) code through the Small 
Business Administration website. 

Ex-Im offers a variety of financing instruments, including loan 
guarantees,[Footnote 6] export credit insurance, and working capital 
guarantees.[Footnote 7] Ex-Im provides its insurance either directly to 
exporters (non-bank-held insurance) or to banks which in turn finance 
U.S. exporters (bank-held insurance). For the bank-held insurance 
policies, Ex-Im authorizes the policy for the bank, which does not know 
at the time it applies for the financing which exporters will 
eventually use the export credit insurance. 

Trends in Ex-Im's Small Business Financing: 

Between fiscal years 2002 and 2007, Ex-Im increased the percentage of 
its financing for small businesses and continued to finance most small 
business transactions through insurance or working capital guarantees. 

Ex-Im Small Business Financing Share Has Recently Exceeded 20 Percent: 

Ex-Im met the Congressional requirement to make available not less than 
20 percent of its financing authority for small businesses in 2006 and 
2007. In fiscal year 2006, Ex-Im's small business financing was 26.2 
percent of its total financing and in fiscal year 2007 it increased to 
26.7 percent. In fiscal years 2002 through 2005, Ex-Im did not reach 
the goal, with its small business financing share ranging from 16.9 
percent to 19.7 percent. (See fig. 1.) 

Figure 1: Ex-Im's Reported Proportion of Financing Directly Benefiting 
Small Business, Fiscal Years 2000-2007: 

This figure is a line graph showing Ex-Im's reported proportion of 
financing directly benefiting small business between fiscal years 2000 
and 2007. The X axis represents the fiscal year, and the Y axis 
represents the percentage. 

[See PDF for image] 

Source: GAO analysis of Ex-Im data. 

[End of figure] 

The percent of Ex-Im financing directly benefiting small business 
depends on the value of small business financing compared to the value 
of non-small business financing. (See fig. 2.) While the small business 
financing value slowly increased between fiscal years 2001 and 2007, 
the value for non-small business financing was noticeably lower in 2006 
and 2007, compared to 2005. 

Figure 2: Comparison of Ex-Im Small Business and Non-Small Business 
Financing, Fiscal Years 2000-2007: 

This figure is a combination line graph showing the comparison of Ex-Im 
small business and non-small business financing between 2000-2007. The 
X axis represents the year, and the Y axis represents U.S. dollars in 
billions. The lines create shaded sections. The lowest is the total 
authority directly supporting small business. The next is total 
authority supporting non-small business. The top line represents total 
authorized loans, guarantees, and insurance. 

[See PDF for image] 

Source: GAO analysis of Ex Im Bank data. 

[End of figure] 

Ex-Im Finances Most of Its Small Business Transactions through 
Insurance or Working Capital Guarantees: 

Ex-Im has primarily used three types of tools to finance small business 
transactions: non-bank-held insurance, working capital guarantees, and 
bank-held insurance (see fig. 3). In 2007, each tool was used to 
finance about 30 percent of the $3.4 billion Ex-Im made available for 
small business transactions. The remaining 8 percent of small business 
financing was through medium-and long-term loans and guarantees. This 
pattern contrasts with non-small business financing, where the largest 
share is through medium-and long-term loans and guarantees. 

Figure 3: Ex-Im's Reported Amount of Fiscal Year 2007 Transactions by 
Finance Instrument. 

This figure is a bar graph showing Ex-Im's reported amount of fiscal 
year 2007 transactions by finance instrument. The X axis represents 
dollars in billions, and the Y axis represents the types of 
transactions. 

[See PDF for image] 

Source: GAO analysis of Ex Im Bank data. 

[End of figure] 

Ex-Im's use of bank-held insurance has posed some challenges for 
accurately calculating the small business financing share, in part 
because Ex-Im does not know who the exporter will be prior to 
authorizing the bank-held insurance transaction and therefore cannot 
make a small-business designation at that time. For bank-held insurance 
and credit guarantee facilities, Ex-Im estimates the share of the 
financing benefiting small business based on data regarding previous 
shipments under those types of transactions.[Footnote 8] These 
estimates of the small business share of authorized transactions can 
differ significantly from the small business amounts actually shipped 
under the authorizations. For example, in 2005 Ex-Im authorized a $10 
million short-term insurance policy under which no shipments had been 
reported prior to our March 2006 report. In contrast, in 2005 Ex-Im 
also authorized a $50 million short-term insurance policy where 
shipments under the policy exceeded $87 million for a 6-month period 
(or $174 million on an annualized basis). 

Weaknesses Limited Ex-Im's Ability to Measure Small Business Financing; 
Ex-Im Has Implemented Improvements: 

In our 2006 report, we found weaknesses in Ex-Im's data and data 
systems for tracking small business financing and made recommendations 
for improvement, and Ex-Im has taken steps to address those weaknesses. 
We reported that, while Ex-Im generally classified companies' small 
business status correctly, weaknesses in its data and data systems 
limited its ability to accurately determine its small business 
financing amounts and share. In implementing "Ex-Im Online" and certain 
internal control measures, Ex-Im has improved its ability to accurately 
measure small business financing. 

Ex-Im Generally Classified Companies' Small Business Status Correctly: 

Based on our review of independent data and Ex-Im's paper transaction 
files, GAO reported in 2006 that Ex-Im's classification of companies' 
small business status was generally correct. From our review of Ex-Im's 
electronic databases and Dun and Bradstreet data on companies' sales 
and employment, we estimated that, 83 percent of the time, Ex-Im's 
small business designation[Footnote 9] matched the designation based on 
Dun and Bradstreet data. Based on a review of Ex-Im's official paper 
transaction files in instances where Ex-Im and Dun and Bradstreet's 
designations differed, we determined that Ex-Im's designation was 
justified in most instances.[Footnote 10] 

Weaknesses Existed in Ex-Im's Process for Calculating Its Small 
Business Financing: 

In our 2006 report, we identified weaknesses in Ex-Im's process for 
calculating its small business financing and made some corresponding 
recommendations for improvement. The weaknesses ranged from internal 
control weaknesses that may affect only a few transactions a year to 
more significant weaknesses in Ex-Im's system for estimating about one- 
third of its small business support. 

Internal Control Weaknesses Existed in Ex-Im's Data Systems Used to 
Measure Small Business Financing: 

We reported two internal control weaknesses in Ex-Im data 
systems[Footnote 11] used to calculate and report on Ex-Im's small 
business financing; by implementing its interactive database, Ex-Im 
Online, the bank has largely addressed those weaknesses. 

First, we found that Ex-Im's electronic data systems used to calculate 
its small business support did not contain complete or up-to-date 
information on companies' small business status. As a result, to obtain 
the most current information for these companies, Ex-Im officials 
needed to identify and locate paper transaction files. While Ex-Im's 
paper files generally supported its small business designation, we 
found a significant number of discrepancies between Ex-Im's paper and 
electronic files. 

Second, we found that Ex-Im's data systems sometimes contained 
conflicting information for the same company. Ex-Im maintained 
information about insurance transactions and participants in one data 
system and information about loans and guarantee transactions and 
participants in another data system. According to Ex-Im, updating 
information in a company's record (including its small business 
designation) in one database did not update the company's record in the 
other database. As a result, the two databases could, and in some cases 
did, have conflicting information about the same company. 

GAO recommended that Ex-Im improve the completeness, accuracy, and 
consistency of its transaction data. Since the issuance of the GAO 
report, Ex-Im Bank has implemented a number of controls to enhance and 
reinforce the bank's methodology for capturing relevant information for 
reporting small business statistics. Most notably, Ex-Im replaced its 
previous data systems with Ex-Im Online, an interactive, web-based 
process that allows exporters, brokers, and financial institutions to 
transact with Ex-Im electronically. According to Ex-Im, more than 
seventy-five percent of all applications are now submitted online, 
omitting the need to transfer information from paper copies to the 
bank's electronic files. Ex-Im officials stated that Ex-Im Online also 
includes a direct feed from Dun and Bradstreet, which provides current 
demographic information about a company so that Ex-Im can make an 
accurate assessment of the company's small business status. In addition 
to initiating Ex-Im Online, Ex-Im changed its internal procedures to 
require documented dual signoff on the small business determination for 
each transaction.[Footnote 12] 

Weaknesses Existed in Ex-Im's System for Estimating Small Business 
Financing When the Exporter Is Not Immediately Knowable: 

We reported two weaknesses in Ex-Im's system for estimating small 
business financing when the exporter is not known at the time Ex-Im 
authorizes the transaction, which applied to about one-third of Ex-Im's 
total small business financing for fiscal year 2004. First, we found 
that Ex-Im's estimates might not accurately reflect the amount of small 
business financing under bank-held insurance policies because of large 
differences between the amount of financing authorized and the amount 
of financing used to actually ship goods. For both fiscal years 2004 
and 2005, the value of shipments under bank-held insurance policies was 
a fraction of the total authorized value of the bank-held insurance 
policies. For example, according to Ex-Im records, it authorized $3.4 
billion of bank-held insurance transactions for fiscal year 2004, but 
there were only $280 million in shipments under bank-held insurance 
policies in the first 6 months of the fiscal year. Ex-Im applied its 
estimate of the small business share of transactions, based on these 
shipments, to the $3.4 billion of bank-held insurance policies it 
authorized during the year, and determined that about $720 million of 
the authorized value of bank-held insurance policies during the year 
directly benefited small business. Thus, the method resulted in 
estimates of small business shares for the authorized value of these 
types of transactions based on a very small share (about 8 percent) of 
the total authorized value. 

Also, we found that Ex-Im classified the small business status of a 
significant portion of the companies making shipments as "unknown" and 
excluded them from its calculation of the estimate of its small 
business support. Of the $280 million of shipments under bank-held 
insurance for 2004, for example, an Ex-Im official classified about 
$128 million (or nearly half) as shipments by companies whose small 
business status was "unknown" and excluded these shipments from its 
calculation of total shipments. 

GAO recommended that Ex-Im improve its system for estimating the value 
and proportion of direct small business support for those transactions 
where the exporter is not known at the time Ex-Im authorizes the 
transaction. According to Ex-Im, its implementation of Ex-Im Online 
improves these estimates because borrowers can now enter their shipment 
reports directly into Ex-Im Online. According to Ex-Im, two-thirds are 
being entered in this manner. Ex-Im officials stated that such 
automated submission of shipment information has significantly reduced 
the amount of shipments by exporters whose small business status is 
unknown. They stated that only 3 percent of the fiscal year 2007 
shipments under bank-held insurance were by exporters whose small 
business status was unknown. They also stated that, for credit 
guarantee facilities, no shipments were recorded by exporters whose 
small business status was unknown. 

GAO also recommended that Ex-Im engage an external auditor to audit its 
annual, legislatively mandated report on its direct support for small 
business. Ex-Im engaged Mayer Hoffman McCann P.C., its internal 
auditor, to perform the audit. With respect to credit guarantee 
facilities, bank-held policies, and non-bank-held insurance (i.e., 
single buyer/multi-buyer) policies, the auditors found that Ex-Im's 
process to obtain and calculate eligible small business counts operates 
in accordance with its policy and approved methodology. However, the 
auditors found exceptions to stated policy during their review of the 
working capital guarantee and non-credit guarantee facilities programs. 
For example, in the working capital guarantee program, the auditors 
noted a number of exceptions related to the completion of data fields 
that would have "flagged" these accounts as small business. The 
auditors stated that they believed that Ex-Im management was taking 
action to strengthen supervisory edit controls over these processes. 

Ex-Im's Reporting on the Number of Transactions Directly Benefiting 
Small Business: 

Ex-Im is statutorily required to report on the number of its authorized 
transactions that directly benefit small business; in our 2006 report 
we found that Ex-Im's method of determining this number included some 
transactions that did not directly benefit small business. Ex-Im has 
frequently reported that about 85 percent of its authorized 
transactions directly benefit small business. For instance, in fiscal 
year 2004, it reported that 2,572 (or 83 percent) of its authorized 
transactions directly supported small businesses. This count was based 
on crediting all 698 bank-held insurance policies as directly 
benefiting small business.[Footnote 13] We reported that while many of 
these transactions directly benefit small business, they may not all 
directly benefit small business, as evidenced by the fact that Ex-Im's 
own estimate showed that about 20 percent of the value of bank-held 
insurance policies directly benefited small business during 2004. 

GAO recommended that Ex-Im more accurately determine and clearly report 
the number of transactions that directly benefit small business; 
however Ex-Im officials disagreed with this recommendation and have not 
changed their methodology. Ex-Im officials stated that they reviewed 
their process and believe that it is appropriate. A senior official 
also noted that since the methodology has been used for a number of 
years, the bank can confidently report trends. The bank also believes 
that their methodology provides a conservative estimate. 

Conclusions: 

Since GAO's last report on small business financing in March 2006, Ex- 
Im has made a number of changes. It also surpassed the target of 
allocating 20 percent of its financing to small business for both 2006 
and 2007. While this is partly due to a drop in the overall level of 
financing provided to other customers by the bank, Ex-Im has shown 
increases in the level of business with small firms over several years. 
In addition, Ex-Im has made changes in its data systems which allow 
Congress to have a greater level of confidence in its reporting on 
small business and other matters, and it has instituted new internal 
controls to further increase accuracy in categorizing firms' small 
business status. Managing its resources going forward to respond to 
ongoing Congressional interest in the composition of Ex-Im's financing 
will, undoubtedly, entail new challenges for the bank. We look forward 
to working with Ex-Im further on issues related to evaluation of its 
small business financing efforts, including those directed at 
businesses owned by disadvantaged individuals and minorities, as 
mandated by the Congress with the strong support of this Committee. 

Madam Chairwoman, this concludes my prepared remarks. I would be 
pleased to respond to any questions you or other members of the 
committee may have at this time. 

Contacts and Acknowledgments: 

Should you have any questions about this testimony, please contact 
Loren Yager at (202) 512-4347 or YagerL@gao.gov. Celia Thomas, Miriam 
A. Carroll and Jason Bair also made major contributions to this 
testimony. 

[End of section] 

Footnotes: 

[1] GAO, Export-Import Bank: Changes Would Improve the Reliability of 
Reporting on Small Business Financing, GAO-06-351 (Washington, D.C.: 
March 3, 2006) 

[2] That report also described Ex-Im's interpretation of its 
obligations under the 20 percent small business mandate. 

[3] Pub. L. No. 98-181. The law provided for this percentage to 
increase from 6 percent in fiscal year 1984 to 10 percent in 1986 and 
thereafter. 

[4] Pub. L. No. 107-189. 

[5] The Small Business Administration uses "size standards" to identify 
the largest a company can be and still qualify as a small business. 
Small Business Administration's size standards vary by industry, as 
defined by the North American Industry Classification System, which 
replaced the Standard Industrial Classification system, and are 
typically expressed in either millions of dollars or number of 
employees, reflecting average annual receipts or average employment of 
a firm. 

[6] One type of loan guarantee is a credit guarantee facility, a line 
of credit between a bank or corporation in the United States and a 
foreign bank (or occasionally a large foreign buyer). Ex-Im guarantees 
the repayment of the foreign bank's obligations. The foreign bank then 
makes credit available to the end user of the U.S. exports and takes 
the repayment risk of the local company. 

[7] Ex-Im also provides a small number of direct loans, which are 
primarily used to offer concessionary financing to U.S. exporters to 
match concessionary financing by other countries' export credit 
agencies. 

[8] To make these estimates, Ex-Im analyzes data on exports under each 
type of transaction and determines whether each exporter is small, non- 
small, or unknown by estimating the percentage of the value of 
shipments. Ex-Im divides the value of shipments made by small business 
exporters by the sum of the shipments by small and non-small business 
exporters. (Shipments by companies of unknown size are excluded from 
the calculation.) Ex-Im applies this percentage to the value of the 
entire year's authorized transactions of this type, resulting in its 
estimate of the value of direct support for small business from that 
transaction type. 

[9] The term "small business designation" refers to the decision 
regarding whether or not a company qualifies as a small business. 

[10] Our analysis showed that, where Ex-Im's small business designation 
differed from the designation indicated by Dunn and Bradstreet data, Ex-
Im almost always identified a company that appears to qualify as a 
small business as a non-small business. 

[11] At the time of our analysis, three databases were relevant to Ex- 
Im's small business financing calculation. Two databases stored 
information on companies involved in the transactions, and a third 
integrated information from these databases and performs the actual 
calculation. 

[12] In specific instances for short-term insurance transactions, only 
one signature is required because signing authority has been delegated 
to staff based on certain policy parameters. 

[13] Similarly, in 2007, Ex-Im reported that that 2,390 (or 86 percent) 
of its authorized transactions directly supported small businesses, 
including five credit guarantee facilities and 374 bank-held insurance 
policies.

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