Take Your Business Further With EDC
Developing markets have opened doors for Canadian engineering services firms. However, often getting a foot in that door is hindered by anything from difficulties financing the sale or project, to political or civil instability in the host country...
Developing markets have opened doors for Canadian engineering services firms. However, often getting a foot in that door is hindered by anything from difficulties financing the sale or project, to political or civil instability in the host country, to buyer bankruptcy — most of which is out of the control of the exporter.
Canadian companies venturing into new and developing markets are often faced with challenges that can make or break their ability to succeed in that market. That’s why more Canadian companies are turning to EDC and the wide range of trade finance services we can offer exporters.
Companies of all sizes can rely on EDC to offer sophisticated trade finance and insurance solutions for projects in foreign markets — including higher-risk developing markets. Our in-depth experience in the civil infrastructure, energy, mining and other sectors, coupled with our sophisticated and flexible product offerings will leave you well positioned to win sub-contracting bids without sacrificing the health of your balance sheet.
Even before you’ve won the contract, EDC can be a partner in your success by helping you learn more about the market and your foreign buyers, ensuring you have the tools in place to successfully compete in any given market.
EDC and ACEC: a growing partnership
In June, Export Development Canada (EDC) and ACEC announced a new partnership agreement that gives ACEC members access to EDC’s in-depth market knowledge; information on global economic conditions, industry sectors and countries; and an extensive network of relationships with public and private financial institutions and foreign buyers across the globe.
EDC can assist your company to break into new markets and manage the financial risks associated with supplying major infrastructure projects in developing regions.
“A common issue we hear from ACEC’s members is the lack of access to working capital,” explains Leslie Kenway, EDC Director, Mining, Infrastructure Development and Services Team. “In response, we’ve developed a range of products that not only protect exporters’ revenues, but also can help you secure additional working capital from your bank.
“Many engineering firms only know EDC as a lending organization, but in reality that is just one part of what we do. Our financial solutions help companies of all sizes access much needed working capital. Recently, we have had the opportunity to work with a number of Canadian engineering companies to develop customized facilities that streamline the approval process, giving companies better access to working capital so they can spend the time doing what they do best — building their business.”
Here is a snapshot of some of EDC’s risk management solutions:
Accounts Receivable Insurance. Are you sure your U.S. or foreign buyer will pay? Don’t risk it. With EDC Accounts Receivable Insurance in place you’re protected for up to 90 per cent of your loss and you’ll be free to enter new markets and offer more competitive payment terms. Accounts Receivable Insurance on your foreign receivables will also allow you to increase your margin capacity under your operating line of credit, thereby improving access to working capital financing.
Contract Bonding Services. We make it easier and less risky to issue bonds as part of your international contract. We can provide a 100 per cent guarantee to your bank so they don’t freeze your line of credit, plus we can protect you from having your foreign buyer call your bond when you’ve done nothing wrong with an insurance policy that protects you for up to 95 per cent of the value of the bond.
Pre-Shipment Financing. This helps smaller exporters finance their pre-shipment working capital needs. EDC will guarantee up to 75 per cent of a loan made by a bank to the exporter involving a specific export contract.
Political Risk Insurance. Whether you’re leasing equipment, or own a warehouse or manufacturing facilities in a developing market, political and economic catastrophes can mean a huge loss. EDC Political Risk Insurance will protect you for up to 90 per cent and may enable you to attract additional project capital.
Direct Loans or Lines of Credit. Meet your buyer’s terms without putting your bottom line at risk, through EDC’s medium and long-term financing. You’ll be even more competitive and better positioned to close the export sale with a range of repayment terms and competitive interest rates, and customized financing packages for you and your customers.
Contact our experts early in your business development planning and find out how we can help open the door to export opportunities. Call toll-free 1-888-336-4143 or visit www.edc.ca.