Company and transaction size is not a factor if your customer needs EDC bonding support. More than 85% of EDC's customers are smaller exporters.
Generally EDC looks at a number of factors before agreeing to provide cover.
- Exporter's managerial, technical and financial capabilities;
- Acceptable contractual terms of reference;
- Acceptable bonding/guarantee instruments;
- Current conditions and economic outlook in the buyer's country, as well as the buyer's profile; and
- Acceptable Canadian content in the goods and services or other significant benefits to Canada.
Indemnity to EDC
As part of the Application process, the Exporter must sign an Indemnity agreement which means they agree to pay EDC if EDC pays the Bank under the Performance Security Guarantee.
EDC needs the following information from the Exporter for Performance Security Guarantees:
- Completed EDC Application and Indemnity (signed by the Exporter) (see Forms);
- Completed General Information Checklist (see Forms); and
- Questionnaire on Corporate Capabilities (see Forms).
The Process:
- EDC receives the signed Application and Indemnity.
- If approved, EDC will issue a letter of offer to the Bank, along with a copy of the guarantee, which is also copied to the Exporter. The letter of offer will include an indication of the guarantee fee and payment due date. EDC can be paid directly by either the Exporter or the Bank.
- Bank returns the letter of offer, duly signed by the Bank.
- Upon receipt of the PSG fee an Effectiveness Notification is issued to the Bank confirming cover and binding EDC.
Summary:
See Account PSG - Memorandum to All Bankers under Forms and tools.
