PO Box 3043
Murrumbateman, NSW 2582, Australia
Not your run-of-the-mill financier
Before we go there, it’s important to highlight that Export Finance Australia is different from traditional commercial lenders in two key respects. First, as a corporate Commonwealth entity within the Foreign Affairs and Trade portfolio, Export Finance Australia plays a unique role in providing finance to support export trade and overseas infrastructure development when commercial banks cannot. Export Finance Australia has a broad, flexible mandate that enables it to support a range of infrastructure that delivers Australian benefits, including supporting the regional transition to cleaner energy sources. In other respects, Export Finance Australia is similar to other banks in that it charges fees and commercial interest rates, requires securities and other information to provide confidence finance can be repaid. The second way Export Finance Australia is unlike your average bank is its responsibility for the Australian Government’s National Interest Account (NIA). The NIA is separate from its ‘Commercial Account,’ which Export Finance Australia runs on a commercial basis. Under the NIA, the Minister for Trade can direct Export Finance Australia to support transactions that are in the national interest. The Commonwealth receives all income on NIA transactions. It also takes responsibility for all risks and losses. The NIA currently has several financing facilities:
As part of theAustralian Government’s Future Made in Australia agenda, Export Finance Australia can finance major domestic projects without an export link that are aligned with the National Interest Framework, subject to Government consideration and approval.
Export Finance Australia’s finance solutions
Loans
Export Finance Australia offers a range of loan products. These can largely be categorised into two groups, a Small Business Export Loan for small businesses needing to borrow $20,000 to $350K, and more tailored loan solutions for over$350,000, this includes terms loans and lines of credit.
Small Business Export Loans can be used to finance contracts and purchase orders with international buyers and Australian exporters·
To be eligible for a Small Business Loan, you need to be an Australian registered company (i.e.have an Australian Company Number), have been trading for at least two years, have a turnover of between $250K and $10 million, and the loan needs to be for export-related purposes. You also need to generate 20% of your revenue from export sales –though chat to Export Finance Australia if you don’t meet this criterion, as you may still be eligible for support with export-related contracts and export market development costs. Helpfully, you don’t need to secure the loan with property – just a director(s) guarantee. There’s also no penalty for early repayment.
For more information on Export Finance Australia’s Small Business Export Loan, click HERE
[hyperlinkhttps://www.exportfinance.gov.au/how-we-can-help/our-solutions/small-business-export-loan/].
Tailored loans are for those requiring more than $350,000either as a stand-alone loan or as complementary finance to a bank loan. These solutions can be used for a range of export-related needs such as to support an international expansion, or export-related working capital or capital expenditure. These loans can support businesses that export or businesses that are part of an export supply chain. They also support businesses wanting to export to emerging markets. To be eligible, your revenue in the last financial year needs to be over $250,000, you need to be an Australian registered company with an Australian Company Number, and your business needs to have been trading for at least 2 years. There are other eligibility criteria, so it’s super important to chat with Export FinanceAustralia to get the details. You can find out more about Export Finance Australia’s loans, including how to contact the right people to talk to,
HERE [ hyperlinkhttps://www.exportfinance.gov.au/how-we-can-help/our-solutions/loans/].
Bonds Export Finance
Australia can also help with bonds. What’s a bond? Good question because ‘bonds’ can refer to different kinds of financial products. In the case of ExportFinance Australia, the kinds of bonds it provides are related to an international sale and/or contract. These bonds are kind of like a financial safety net. They cover some or all of the costs of a traded good or service or contract if not delivered as promised. Bonds support international trade by reducing customer risk – which makes customers more willing to trade!
The kinds of bonds Export Finance Australia provides are:
The eligibility criteria to secure a bond is similar to the criteria for a loan with Export Finance Australia.
Export FinanceAustralia provides a useful explanation of the different kinds of bonds it offers and how they work for those who haven’t used them before, HERE [https://www.exportfinance.gov.au/resources/articles/what-are-bonds-and-how-do-they-work/].
And for more information on ‘surety bonds’, and US surety bonds in particular, click HERE [hyperlinkhttps://www.exportfinance.gov.au/resources/articles/surety-bonds-what-australian-exporters-need-to-know/].
For full details on ExportFinance Australia’s bonds, including how to apply and who to talk to for more information, click HERE [hyperlink https://www.exportfinance.gov.au/how-we-can-help/our-solutions/bonds/].
Guarantees
Guarantees are another way Export Finance Australia helps Australian businesses secure financing for their exporting and/or international expansion. If a business can’t meet the security levels required by a commercial bank to secure financing, EFA can step in with a ‘guarantee’. It’s a great example of how Export Finance can fill a market gap and work with commercial lenders to enable international exports and business growth. Export FinanceAustralia’s guarantees start at $350,000. Eligibility for a guarantee is similar to the eligibility criteria for its loans. Export Finance Australia works closely with the businesses and their banks, so talking to Export FinanceAustralia is key.
You can find out more about Export Finance Australia’s guarantees HERE [https://www.exportfinance.gov.au/how-we-can-help/our-solutions/guarantees/].
Project and structured finance
In addition to Export Finance Australia’s loans, bonds and guarantees, it also offers financing packages that cater to specific projects and customer needs. Considering Export Finance Australia’s focus on filling the market gap and working with commercial banks and Commonwealth Specialist Investment Vehicles (SIVs), the financing options Export Finance Australia offers are useful for businesses operating in or transacting with riskier markets.
Export Finance Australia’s project and structured finance solutions also include finance for projects that purchase Australian goods or services, financing for foreign direct investment that benefits Australia, and political risk and export payment insurance. As each financing solution is tailored to the specific needs of projects and customers – talking to Export Finance Australia team is critical.
Information on the Export FinanceAustralia’s project and structure finance team is available HERE [https://www.exportfinance.gov.au/how-we-can-help/our-solutions/project-and-structured-finance/].
They look like a friendly bunch, so if you’re looking for more information ,giving them a call is a great place to start.
Conclusion
The role of export credit agencies around the world is expanding as governments play a more hands-on role in achieving national security and emissions reduction goals.Australia’s own Export Finance Australia is stepping up to help both businesses and the Australian Government meet the challenges and manage the risks of global markets.
