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The program's objective is to provide Scotiabank subsidiaries with access to competitively priced, medium term funding at either a fixed or floating interest rate, which is used to on-lend to creditworthy importers. The credit decision on the importer, including all repayment terms and conditions, is solely at the discretion of the Scotiabank subsidiary. Under the program Scotiabank Toronto provides medium term financing to its subsidiary and sells EDC a funded participation of up to 85% of the export contract.
- It's simple - Your exporting customer should be encouraged to seek payment in respect of an export contract under a documentary letter of credit, payable at sight and confirmed by Scotiabank in Canada. Aside from normal L/C charges , there are no add-on fees that your customers needs to build into the contract price. By following this process, even if the foreign buyer does not require financing, there is an excellent chance we can advise and/or confirm the L/C.
- It's fast - Although this is a term transaction, our local subsidiaries and affiliates are in an advantageous position to promptly adjudicate the creditworthiness of a potential foreign buyer over another entity which does not have a local presence. In addition, if local security is required or taken, Scotiabank is better placed to handle this and related documentation plus keep legal costs to an absolute minimum.
- Price - There is no application fee under this program. The cost of funding to the Scotiabank subsidiary or affiliate varies depending on the respective market and repayment term which is subject to change every six months (as required for Export Credit Agencies under OECD Consensus Guidelines).
- Taxation - In some markets and in some circumstances to be confirmed on a case-by-case basis, withholding tax may not be applicable on the EDC portion of the funding which helps reduce the overall borrowing costs to the buyer.
- Easy documentation- The Exporter presents documents in accordance with the terms of the (sight) L/C.
- Win/Win - In collaboration with EDC we have a great opportunity to handle both ends of a Canadian export transaction and reiterate Scotiabank as the "International Bank of Choice".
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