US Senator for Washington, Patty Murray, visited Hilliard’s Beer in Ballard last Friday April 3, to chat with brewery owners about ways to develop and grow small businesses in Washington State.

Hilliard owners, Adam Merkl and Ryan Hilliard, showed Murray around their space. Amid large steel 15-barrel vats, a canning line and pallets stacked almost to the ceiling with cases of beer, their conversation moved from discussing how to actually make beer to international trade.

“Our economy here really is based on a lot of folks just like this (Hilliard’s Beer) who start a business. They hire people; they make production and they bring in good economic growth,” said Murray, “Small businesses are a key component to our entire country's economic success.”

Merkl and Hilliard started the brewery in Ballard almost four years ago at 1550 NW 49th St. They started with canning distribution in mind and quickly were moving beer to local merchants.

Right now one the biggest obstacles Hilliard’s Beer faces are issues shipping. Hilliard’s took a big hit when the Port of Seattle slowed down last February. The brewery recently partnered with a Swedish company, Spendrups Bryggeri AB and is moving beer to Europe. Spendrups orders 1800 cases of Hilliard’s Amber per shipment. Spendrups moves about one-third of the US craft beer in Sweden. Hilliard said that in 2015 they hope to ship to Sweden the same volume of beer they sold in the US last year.

“I’ve been thrust into more international stuff than I ever thought I would -- a lot of things I had no idea existed have come on to my plate. All of a sudden I’m concerned with the Ex-Im Bank and port issues,” said Hilliard.

The brewery faced hold-ups in the port, and according to Hilliard, they are lucky that Spendrups is understanding of their situation and has kept Hilliard’s Beer on the shelves.

“I’m happy we have an understanding partner that knows this kind of stuff is out of our control and willing to stick with us, because if it was anybody else doing this they would have just said ‘Ah, let’s forget that project.’”

Hilliard’s Beers started up with Spendrups through the Brewers Association Export Development Program. The EDP was started in 2004 through a grant from the Department of Agriculture’s Market Access Program. Their aim is to inform international markets of the beer brewed in the US to increase distribution. BA reports that since their start they have grown US commercial beer exports around the world. According to BA, in 2013 beer exports grew by 36 percent.

Another issue slowing the brewery’s growth is the red-tape they’ve encountered in applying for capital guarantees said to be provided by Ex-Im Bank and the US Small Business Association.

Many US small businesses trading internationally work with the Ex-Im Bank, which is the official US credit agency that provides working capital, export credit insurance, loan guarantees and direct loans for companies. The agency reports that no transaction is too large or too small. Basically Ex-Im takes the financial risk from US small businesses by backing transactions that private banks wont touch. The bank reports 85 percent of their transactions directly benefit small businesses in the US. The Ex-Im Bank works closely with the US Small Business Administration to determine which small businesses get federal funding.

Pallets of beer cans stacked nearly to the ceiling ready to be filled. In 2015 Hilliard would like to ship to Sweden the same volume of beer they sold in the US last year.

Incidentally, the same day Murray visited the brewery, Hilliard opened a letter from his bank that said he would not be authorize for the Ex-Im working capital he needs to grow his business. Why? The letter said that Hilliard does not have a record of capital that qualifies the business for the loan.

“Of course we don’t have the record of capital -- we are a small business. That’s why we are asking for the loan in the first place,” said Hilliard.

The US Small Business Administration 2015 budget provides $710 million for loan guarantees, supporting equity investment in underserved markets, fee waivers and training opportunities.

Currently, Hilliard’s Brews has nine full-time employees.

“We all just work and do the job until it’s done. I’d love to pay my people a lot more but we are not there yet. It’s great having the volume so we can export because it helps make us more profitable and start to afford to pay our staff for what they are actually doing, but it’s just a matter of getting to that next step.”

Now another issue is looming. The Ex-Im Bank charter extension expires in June, which could hamper US businesses -- especially small business -- ability to export, However, two bills have been introduced in the Senate that would secure long-term reauthorization of bank.

The political limbo worries Hilliard. He said he has invested a lot just to make the beer for the contract with Spendrup, and is disappointed in how things are moving with the SBA. He hopes that speaking with Murray about the problems will help. Murray shared a similar sentiment.

“Often times they (priorities of small businesses) get caught up in the debates about the big businesses, and their needs are very different. So coming here (Hilliard’s Beer) and understanding what happened to them with the port shut-down or the Ex-Im financing really helps me tell a better story back in Washington, DC,” said Murray.

Meanwhile, Hilliard and Merkl plan to do what they can to keep their contract with Spendrups, as well as move beer at home.

“We are one of the larger small breweries in Ballard. If this isn’t what’s helping and creating jobs right here, right now, than I don’t know what is. Every little brewery operating here has three, four, five people that didn’t have a job doing that two years ago.”