For the past 20 years, Fluidyne Engineering Corp. has depended on financial guarantees from the U.S. Export-Import Bank to stay in business. The bank guarantees that Fluidyne will receive regular payments on its sales of heating systems to foreign customers. But the small Minneapolis company has not cost the taxpayers a dime.

So a push among Tea Party Republicans to kill the bank because it represents "corporate welfare" leaves company founder Leonard Frame frustrated.

"People who are pursuing this don't realize how important it is to businesses," Frame said. "If the bank is killed, we would have to find a business model that is not export-related or we would die."

An ideological divide among Republicans has endangered thousands of businesses across the country as the party fights over the so-called Ex-Im Bank, which offers loans, credit insurance and loan guarantees to American exporters and their foreign customers. Free-market purists and small-government libertarians within the GOP don't want to reauthorize funding for Ex-Im when it runs out Oct. 1.

What was once a pro-forma bipartisan exercise has turned into a political grind that leaves business owners outside the Beltway shaking their heads in bemusement and worry.

"It's really simple," said Rick Barrett, the export sales manager at Midwest Hardwood Corp. in Maple Grove. "If they take this away, it puts all of our 350 jobs at risk."

Since 2007, Ex-Im, which borrows from the U.S. Treasury to provide various financial services to American exporters and their customers, has disbursed $116 billion to 7,399 U.S. businesses, including 173 in Minnesota, and helped generate more than $235 billion in exports. The bank has paid back every dollar and earned $2 billion more in profits in the past five years.

But the inclusion of huge corporate players such as Boeing and General Electric on its list of beneficiaries has drawn the ire of free-market think tanks like the Heritage Foundation and small-government advocates like the Tea Party. Their influence on the funding debate became clear when California Republican Rep. Kevin McCarthy was recently elected majority leader of the House. One of McCarthy's first official acts was to change his position from supporting reauthorization of Ex-Im to opposing it.

Michele Bachmann, the Republican who represents Minnesota's Sixth Congressional District, offered a scathing critique of the bank in a June House hearing. Bachmann, a member of the Congressional Tea Party Caucus, focused on the years 1982-95 when, she said, Ex-Im lost money. She used terms like "fraud," "mismanagement" and "failures."

The Export-Import Bank has disbursed more than $50 million to 17 businesses in Bachmann's district since 2007. She declined a Star Tribune interview, but in a statement said "the Export-Import Bank overwhelmingly subsidizes the most politically connected corporations in the world, sending money overseas to foreign countries and companies. It amounts to cronyism financed by taxpayer dollars and puts American small businesses at a competitive disadvantage."

Ex-Im has disbursed more than $314 million to 48 businesses in Rep. Erik Paulsen's district since 2007. The congressman declined to be interviewed, but in a statement said he did not endorse reauthorizing the bank. "I believe reforms to the Export-Import Bank are needed to ensure that taxpayers are not exposed to unnecessary and costly risks," the Third District Republican said.

Second District Republican Rep. John Kline declined an interview through his spokesman. In an e-mail to the Star Tribune, Kline's spokesman Troy Young said it was "premature to speculate" on support for the bank's reauthorization because "the House Financial Services Committee is reviewing the issue and will be conducting more oversight to ensure accountability on behalf of the taxpayer."

Ex-Im has disbursed more than $213 million to 15 businesses in Kline's district since 2007.

Democratic Rep. Betty McCollum of the Fourth Congressional District said the reluctance of "common sense" Republicans like Paulsen and Kline to speak up for Ex-Im has put the bank at greater risk than ever before.

The Tea Party's characterization of the Export-Import Bank as corporate welfare "is an out-and-out lie," she said.

Both of Minnesota's U.S. senators strongly favor the bank's reauthorization.

"We're competing in a global economy and all major exporters have a similar agency," Democratic Sen. Amy Klobuchar said in an interview. "Why would we be cutting this off?"

In an e-mail statement to the Star Tribune, Sen. Al Franken, also a Democrat, endorsed reauthorization that includes reforms to push more Ex-Im assets toward small and medium-sized companies and away from big corporations.

House Democrats Tim Walz of the First Congressional District, Keith Ellison of the Fifth District, Collin Peterson of the Seventh District and Rick Nolan of the Eighth District all say they have business constituents who need the bank in order to grow, if not survive.

Nevertheless, Walz and Nolan both think the Tea Party's outsized influence on House Republican majority leaders will lead to brinkmanship and the need for some kind of stopgap funding to keep the bank going.

"We have a 237-member Republican caucus with 50 Tea Party members dominating it," Nolan said. But letting Ex-Im die "would be a pure prescription for defeat in the next election."

Added Walz: "I think the Senate will [reauthorize] it, the House will ignore it and it will be put into a continuing resolution."

Frame says these political hijinks threaten a business he started in 1952. He said Fluidyne has paid back all the money it has received from the Export-Import Bank, and has paid fees for the financial help as well.

Right now, Fluidyne is negotiating the sale of one of its high-temperature heating systems to India. Without the Export-Import Bank to insure the deal, Frame said, it is dead.

Jim Spencer • 1-202-383-6123