The challenge
In museums, art galleries, heritage sites and public libraries around the world, Lord Cultural Resources makes arts and culture its business. With more than 2,500 projects in 57 different countries, it provides everything from master planning, advice on buildings and feasibility studies, to project management and graphic design services to help cities, government agencies and private corporations boost local culture and heritage.
Among its Canadian clients are the Ottawa Art Gallery, The Royal Conservatory of Music in Toronto and the Montreal Holocaust Museum. In the U.S., it has worked on the Smithsonian National Museum of African American History and Culture in Washington, D.C.
As a result of that success, Lord Cultural Resources receives invitations to bid on projects all over the world, including in emerging markets.
“When you start to do business in less well-known export markets, you are always concerned about getting paid,” says Johnson Paul, CFO of Lord. “The bank asked us to insure our receivables, giving it a greater level of guarantee for our line of credit. That’s when we approached EDC.”
How EDC helped
Over the years, Lord Cultural Resources has used several EDC products, starting with EDC Portfolio Credit Insurance to insure its receivables for contracts across Asia and the Middle East. It has also used EDC’s Account Performance Security Guarantee and the EDC Export Guarantee Program.
The EDC Account Performance Security Guarantee is a guarantee provided by EDC when a foreign buyer wants a bond on a contract. In cultural consulting services, it can be as much as 10% of the contract, which sometimes can be high for a small firm such as Lord Cultural Resources. The EDC Export Guarantee Program, meanwhile, has been useful as leverage to the bank when the company needed an extension on its credit lines.
“We had a certain limit on our line of credit and that was the most risk the bank was willing to take despite the fact that our receivables were good,” Paul says. “We said, ‘Our needs are very high and your limits are very low,’ but their concern was that most of our receivables were high exposure. They recommended this product in which EDC insures an additional credit limit with the bank.”
The result
Gail Lord, president of Lord Cultural Resources, says the biggest way EDC helped her company was in helping it finance contracts in lesser-known global markets.
Today, Lord Cultural Resources is the world’s largest cultural planning firm, having conducted projects in 57 different countries. Paul says a large percentage of its work is in international markets, something Gail Lord always knew would be the case since the Canadian market is too small to sustain a specialized business its size. “However, some of our most creative projects are in Canada,” says Lord, “such as the Canadian Museum for Human Rights, which is featured on the new Canadian $10 bill and the Diversity Garden, both in Winnipeg.”
The United States accounts for 35% of the company’s business and other strong markets include Africa, the Middle East (UAE and Saudi Arabia), the Far East, Southeast Asia, Europe and the United Kingdom. Lord Cultural Resources has worked on 148 projects in England alone. Its clients have included large museums such as the Tate and the Louvre and emerging new cultural entities such as the Perlan Museum in Iceland.
When it comes to export goals, Gail Lord is hoping Lord Cultural Resources can increase its share of the U.S. market and also set its sights on Africa. “We think Africa will become increasingly important.”
We used EDC’s Export Guarantee Program for several years. It greatly helped with our cash flow needs. It’s comforting to know there’s that extra cushion.
EDC service used
Portfolio Credit Insurance
EDC Credit Insurance is a solution that’s ideal if you’re looking to insure your business against non-payment.
It covers up to 90% of losses should your customer not pay, due to circumstances such as bankruptcy, payment default, market hostilities or currency conversion or transfer.
EDC service used
Working capital
Our Export Guarantee Program (EGP) can help your bank provide you with additional financing.We share the risk with your bank by providing a guarantee on the money you borrow, encouraging them to increase your access to working capital.
EDC service used
Bonding and guarantee solutions
Posting bonds and letters of guarantee are a necessary part of exporting—buyers can demand bonds at almost any stage of the contract—and issuing bonds can be expensive and risky, since your financial institution will freeze your operating line or ask for collateral equivalent to the amount of the bond.
With the protection offered by our bonding and guarantee solutions, your bank may choose to drop its collateral requirements, helping you free up much-needed working capital.
