EFIC and Commonwealth Bank to help SME exporters gain access to working capital under new arrangement
31 August 2011: Commonwealth Bank and Export Finance and Insurance Corporation (EFIC) today announced the signing of a Master Working Capital Guarantee Facility to help Australian exporters gain additional working capital to finance export contracts.
A common challenge for small to medium enterprise (SME) exporters is stretching their working capital to meet the many demands of a growing business, from developing business opportunities, to winning contracts, and delivering on their contracts.
Under this arrangement , EFIC can provide a guarantee to Commonwealth Bank, enabling the Bank to lend to its SME customers the additional working capital they need to finance their international sales contracts.
"The benefit of this arrangement between Commonwealth Bank and EFIC is that exporters can access working capital finance, without having to provide as much security for the loan as we would require without EFIC's guarantee," explains Tony Sacre, Global Head of Trade Finance and International Payments, Commonwealth Bank.
"In today's climate, where exporters are already struggling with the added pressure of a strong Australian dollar, this sort of facility is particularly important to ease the pressure on cash flow and underpin growth. We hope to work with many exporters moving forwards, providing them with the right financial requirements to help them stay competitive."
As the Australian Government's export credit agency, EFIC helps Australian exporters to overcome financial barriers, and access to working capital is an all-too-common barrier faced by many SMEs.
Andrea Govaert, EFIC's Executive Director, SME and Mid-Market said, "Some of the exporters EFIC has supported have such potential with innovative products and incredible business acumen, but their finances are absolutely stretched getting the business to where they are, and the value of their assets is insufficient to enable the lender to provide additional finance.
"Guarantees that EFIC issues under the agreement with Commonwealth Bank can help Australian businesses to finance their export contracts and keep growing their businesses internationally."
Export working capital is just one product in a suite of solutions Commonwealth Bank provides to SME exporters. The Bank also offers foreign exchange services and hedging strategies, trade finance facilities, insured export finance, foreign currency accounts and export risk management solutions. A full list is available at www.commbank.com.au/trade-finance.
EFIC's export working capital guarantee is a flexible guarantee which can support a single export contract or many export contracts with different buyers. Generally, the guarantee is for a minimum of $500,000.
About Commonwealth Bank of Australia
The Commonwealth Bank is Australia's leading provider of integrated financial services. We understand that managing international trade requires commitment and knowledge of the unique challenges faced. We also appreciate issues affecting our region and business. Our dedicated team of specialists has the expertise and market knowledge to support and partner you in growing your business. We offer a wide range of products and services designed to support and help overcome any challenges in international trade.
About Export Finance and Insurance Corporation
EFIC provides finance and insurance solutions to help Australian exporters overcome the financial barriers they face when growing their business overseas.
As the Australian Government's export credit agency, we can help successful businesses to win, finance and protect export trade or overseas investments where their bank is unable to provide all the support they need.
We work directly with exporters or with their banks to provide loans, guarantees, bonds and insurance products which can be tailored to meet the needs of both large and small exporters.
EFIC is uniquely placed to do this: we use over 50 years of export finance and industry expertise, contacts at financial institutions around the globe, the strength of our AAA credit rating and an entrepreneurial business approach to make export deals happen.
We practise responsible lending and uphold social and environmental best practice in the transactions we support.
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