You need to manage all kinds of upfront costs before you are paid. Our Export Guarantee Program shares the financial risk with your bank so you can:
- get the financing you need to break into new markets,
- purchase the new equipment necessary to take on new orders, or
- support foreign investments
More working capital
Regardless of the size of your company, our Export Guarantee Program can help you get increased access to financing and is a cost-effective way to free up cash flow.
Our guarantee to your financial institution that your loans and other financing arrangements will be paid back may give them the confidence to provide additional support. That means you can complete current contracts with confidence, and still have the working capital to secure the next deal.
The Export Guarantee Program can provide your financial institution with guarantees on financing for a variety of activities, including:
- work in progress and inventory related to export contracts;
- on-going working capital needs;
- the purchase of equipment;
- federal and provincial Research and Development Tax Credits (R&D) related to both your pre- and post-filing period. We can provide a partial guarantee to financial institutions that are willing to provide loans using the tax refund as collateral;
- investments outside of Canada and general working capital support for your foreign subsidiaries;
- foreign-domiciled inventory of finished goods for which you have legal title; and
- increasing your operating line of credit by margining of foreign accounts receivables.
The export guarantee coverage is typically 75% of the amount of the loan your financial institution provides, however higher coverage is possible for small loans or investments outside of Canada.
To qualify for EGP support:
Your financial institution must be willing to establish a credit arrangement with you and participate in the financing.
For loans not directly related to an export transaction your most recent consolidated year-end Foreign Business Sales1 must have been at least 15% of total consolidated sales. If this is not the case, we will review your company’s export strategy and expected future export sales to see if support is possible.
1Foreign Business Sales includes: i) company’s export sales; ii) company’s Canadian subsidiaries’ export sales; and iii) company’s subsidiaries’/branches’ sales to non-Canadians, but excludes all inter-company sales.