Don’t Shy Away from Large Contracts!
By Hal Miller
If you are awarded a larger-than-usual contract, it can put a strain on your cash flow. With EDC's Pre-Shipment Financing Program, you can confidently pursue and fulfill large international contracts....
If you are awarded a larger-than-usual contract, it can put a strain on your cash flow. With EDC’s Pre-Shipment Financing Program, you can confidently pursue and fulfill large international contracts. In cooperation with Canadian banks, EDC has developed a risk-sharing guarantee aimed at encouraging banks to advance pre-shipment loans to small and mid-sized exporters. This guarantee program helps finance work-in-progress for export contracts, and can also support components sub-supply.
How does it work? The program is available to Canadian companies in most sectors with annual sales less than $25 million. If your bank agrees to participate in pre-shipment financing for your export contract, then the rest is handled by the bank. EDC works in the background, covering up to 75 per cent of your total loan — up to the cost of the goods sold. And there are no extra charges or paperwork — you pay the normal bank fees and interest, and deal directly with your bank.
Hal Miller is a Business Development Advisor for EDC’s Small Business Financial Solutions Team.
