Export Development Canada

Transcription

1 Export Development Canada EXPORT FUNDAMENTALS WORKSHOP FEBRUARY 19 TH, 2015 HOW CAN EXPORT DEVELOPMENT CANADA (EDC) SUPPORT YOUR COMPANY?

2 OUTLINE About EDC EDC's Foreign Representation Overview of EDC Products Contact Information 2

3 ABOUT EDC Canada s Export Credit Agency Crown corporation wholly owned by Government of Canada Financially self-sustaining Operates on commercial principles Qualifying as an exporter 3

4 EDC S FOREIGN REPRESENTATION 4

5 CONNECTING WITH CANADIAN BUSINESSES ACROSS CANADA 5

6 OVERVIEW OF EDC PRODUCTS

7 OUTLINE Accounts Receivable Insurance Contractual and Financial Bonding Services Export Guarantee Program 7

8 ACCOUNTS RECEIVABLE INSURANCE Protect against foreign buyer s failure to pay Enter and expand into new markets Offer more flexible payment terms Increase access to working capital allows you to increase the margining of AR to 90% Risks covered may include: bankruptcy or insolvency, contract cancellation, refusal to accept goods, cancellation of import/export permits, war and related disturbances, conversion & transfer of currency 8 edc.ca/insurance

9 INSURANCE FREES UP OPERATING LINE Assigned Canadian Bank AR Policy Contract Exporter Foreign Buyer 9

10 CASE STUDY -Trade Protect Trade Protect is a web-based selective cover credit insurance offering that lets exporters apply for coverage, receive a quote, pay by credit card and file claims entirely online. Insuring credit limits up to 350K Selective insurance needs Coverage can be purchased in 90 and 180 day blocks For 90 day block.554% -.698% Simple and convenient to access 24-7 View policy history, up to date documents EXPORTER: Canadian manufacturer of luxury bed linens and quality down products CHALLENGE: Offer 90 day payment terms to retailer in Hong Kong and protect against risk of nonpayment EDC SOLUTION: Trade Protect Make payment from offer page by credit card, 15 days to accept offer Increase credit limit request mid term, up to 350K Cancel coverage & customer receives applicable refund BENEFIT: Quick, automated, A/R Insurance completed online in only 15 minutes. Direction to pay for banks can be added. 10

11 BONDING SERVICES Get bonds without tying up cash! EDC provides a 100% guarantee to your bank so it can issue guarantees to your customers and suppliers Security is an indemnity agreement Contractual Guarantees: bid, advance payment, performance, warranty etc Financial Guarantees: foreign exchange, supplier bonds etc. EDC shares the risk with your surety company Protect yourself from wrongful calls 11 edc.ca/bonding

12 EDC BACKSTOPS PERFORMANCE Guarantee Advise EDC X Letter of Credit Foreign Bank Security Confirm Contract Exporter Foreign Buyer 12

13 Case Study -- Sidney based exporter Canadian Exporter -Designer and manufacturer of environmental monitoring systems -Selling goods and services to buyers outside of Canada -Needs = to protect against risk of non-payment and to free up working capital Bank/EDC Solution: EDC provides an Accounts Receivable Insurance (ARI) policy to cover the risk of buyer default at 90%. Since there is a Direction to Pay in place, the Bank can margin receivables at a higher percentage knowing AR is insured. Premium in the 0.3% to 1.2% range. The Bank issues letters of guarantee/bonds for performance under contracts. Instead of tying up cash for the duration of the bond, EDC provides a 100% guarantee to the Bank to free up collateral associated with the bonds. Fee is in the 1-2% range per annum. Benefits: Ability to offer payment terms to end buyers and be more competitive Affordable working capital solution on an unsecured basis Information: For more information on Accounts Receivables Insurance and Bonding, please visit under the Our Solutions tab. 13

14 EXPORT GUARANTEE PROGRAM EGP can help with your export-related activities by providing guarantees on loans to finance: Work in progress and inventory Ongoing working capital needs Export Contract financing Federal and provincial Scientific Research & Development Tax Credits Equipment Loans Foreign domiciled inventory Foreign Acquisition 14 edc.ca/financing

15 Case Study -- Vancouver based exporter Canadian Exporter -Company is a full service development and consulting company for ios app development -They build custom mobile applications for an ever-growing list of fortune 1000 clients -Needs = to protect against risk of non-payment and to free up working capital Bank/EDC Solution: EDC provides an Accounts Receivable Insurance (ARI) policy to cover the risk of buyer default at 90%. Since there is a Direction to Pay in place, the Bank can margin receivables at a higher percentage knowing AR is insured. Premium in the 0.5% to 0.8% range on open account terms up to 180 days. EDC provides two loan guarantees (EGPS): 1) SRED allowed bank to lend against R&D expenditures prior to filing with CRA, and 2) Operating line allowed bank to provide additional working capital to launch version 2.0 of their software along with additional funds for marketing, advertising and sales generation Benefits: Ability to offer payment terms to end buyers and be more competitive Bank is able to include foreign AR in the borrowing base Obtain additional working capital to fund international growth Information: For more information on Accounts Receivables Insurance and Bonding, please visit under the Our Solutions tab. 15

16 LET S TALK Heather Stokes (sales >10 million) hstokes@edc.ca Chris Theeparajah (sales <10 million) ctheeparajah@edc.ca