The U.S. textile industry is struggling with a new credit crisis that is undermining billions of dollars in exports to the Western Hemisphere, its top market. The industry has faced a long-term credit crisis for more than a decade, but the situation has worsened with the economic downturn and bank failures and bailouts in the U.S.

The volume of U.S. textile exports to the region—most to Mexico and Central America—has declined 24% since last year because it is harder than ever to obtain financing credit and guarantees.

The National Council of Textile Organizations and several of its member textile firms in the Carolinas, including Mount Vernon Mills, Park dale Mills, and Tuscaloosa Yarns, along with the National Cotton Council of America are lobbying to secure more financing and seeking help from Congress.

Cass Johnson, President of NCTO, said in recent testimony before a House committee that U.S. government institutions, banks, and insurers have withdrawn credit from the $25 billion Western Hemisphere textile and apparel trade sector. More U.S. lenders are refusing to accept foreign accounts receivable as collateral.

In addition, U.S. apparel manufacturers and other textile mill customers have started asking mills to extend longer credit terms, sometimes as much as 150 days, and to do so without U.S. Export-Import Bank insurance coverage, factoring, or private credit coverage.

The House passed a bill in October increasing the size of the SBA loans to $5 million, considered a good first step by the textile industry, but the bill has stalled in the Senate, which is bogged down in negotiations over health care legislation.