Trade finance that’s about more than the numbers

31 Oct 11

For SMEs doing business overseas, having the right innovation, expertise and business acumen is not enough in times of economic uncertainty.

Sometimes getting their business established can leave the SME financially stretched, and they find that they do have enough capital for a bank to provide the extra financing needed to take the business to the next level.

Sound familiar? This is a scenario EFIC encounters daily, and one we helped many exporters to overcome on their way to international success.

The current economic climate offers both opportunities and challenges for SMEs. On the plus side, booming economies in Asia, the Middle East and Latin America are creating lucrative opportunities that can transform a small business. On the negative side, the strong Australian dollar and post-GFC reduced commercial appetite, means accessing enough working capital to run a business and pursue growth strategies is more of a challenge than ever.

It’s no wonder the last year or two has seen Australian’s export credit agency, Export Finance and Insurance Corporation (EFIC), called upon by more and more exporters and their banks. EFIC provides finance and insurance solutions to help Australian exporters overcome the financial barriers they face when growing their business overseas.

Andrea Govaert, EFIC’s Executive Director, SME and Mid-Market explains, “We offer a wide range of solutions and can potentially help with any transaction or project related to exports. We are also flexible and can assist with anything from major projects for multinationals to small transactions, where we may provide support of only a couple of hundred thousand dollars.”

EFIC works directly with exporters or their banks to provide loans, guarantees, bonds and insurance products tailored to meet the needs of both large and small enterprises.

“Generally we’re called upon to look at transactions that have an export component,” Ms Govaert said. “We see a lot of exciting opportunities that, if the SME could just access further financing, would see its business move to the next level. We take a pragmatic view, ensuring we assess the financial viability of the transaction as well as the technical capability of the SME to deliver on its commitments under the contract.

“The amount and nature of support we provide for each transaction varies greatly and is determined on a case-by-case basis. For larger transactions, we prefer to have a direct relationship with the company. For smaller transactions, we often work with the exporter’s bank to make the deal happen.”

As part of servicing the SME market gap, “We’re comfortable in both developed and emerging economies, such as parts of Africa and South East Asia,” Ms Govaert said. “We have an open mind and consider each transaction on its own merits.”

For more information: visit www.efic.gov.au