Commonwealth Bank and Export Finance and Insurance Corporation (EFIC) have signed 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,” says 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.
Export Finance and Insurance Corporation
Ph: 02 9201 2276