EFIC backs SME in Chinese venture

19 Jan 12

Despite the global economic downturn, Australian businesses continue to find exciting opportunities to trade and expand overseas.

It's at times like these that viable international opportunities can be at risk due to the challenges in providing adequate security to underpin the financing required. Often the bank may agree with their customer’s potential for success, but simply can’t look beyond the balance sheet.

Strong demand from both the large corporate and SME sectors, particularly those involved in or supplying to the manufacturing and mining industries are creating further demand for services from Australia’s export credit agency, Export Finance and Insurance Corporation (EFIC).

That was the case of Innovative Technologies 2 Pty Ltd (ITG), a Melbourne-based automotive manufacturing supplier that won a $1.4 million contract to manufacture and supply production line equipment for a client in China. However, like many SMEs going through rapid growth, ITG’ s working capital was stretched by the funding required for the new contract works.

To support ITG, EFIC provided a $750,000 export working capital guarantee to the company’s bank, ANZ. ANZ was then able to lend this amount to ITG to help finance the manufacture of the equipment.

With the help of EFIC’s export working capital guarantee, ITG was able to deliver on this contract and once again demonstrate their ability to meet the market demands on high quality vehicle testing equipment in the Asia-Pacific region.

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