Our Debt Advisory team consider the Export Capital Facility to have some key advantages over many other traditional forms of debt for businesses with an export focus.
This Facility is designed to help fill a gap where traditional lenders do not have the risk appetite to lend. This is often the case where the source of the cash flow for the repayment of the loan is dependent on overseas sources - either customers/markets in foreign jurisdictions or counterparty banks with little history in Australia.
The Federal Government backing through this scheme ensures your business can access the appropriate finance facilities. This occurs where the Government either provides additional or stronger security to your local Australia bank to provide the facilities, or to provide the loans or working capital facilities directly in support of your export opportunities.
The Australian Government has established a $500 million COVID-19 Export Capital Facility to assist previously profitable Australian exporters whose businesses have been impacted by COVID-19 through Export Finance Australia (the Government’s export credit agency).
Exporters will be able to access loans from $250,000 to $50 million under the Facility. The Facility will complement other measures announced by the Government, which enable banks to support new and existing clients. Exporters should contact their banks in the first instance to determine what assistance may be available to them.
To be eligible, you must be an Australian business who exports or operates in an export supply chain and:
- Have been trading for at least two years
- Have had profitable operations in either of the two financial years before COVID-19 impacted markets
- Are unable to secure finance from the private market because of COVID-19
- Have an annual turnover of at least $250,000.
Export Finance Australia’s focus is exporters, including:
- Small and medium enterprises (SMEs) exporters
- Businesses in an export supply chain
- Inbound tourism services
- Online businesses selling to overseas customers
- Businesses operating in emerging and frontier markets.
Eligible Capital Assistance activities
The Capital Facility can assist with:
- Working capital support to finance against supplier invoices or international purchase orders
- Capital investment to purchase new equipment and expand your export operations
- International expansion to establish or grow your business operations overseas
- Online growth to invest in eCommerce and grow your sales to international customers.
Applicant information required
Eligible applicants will need to provide:
- Historical financial statements demonstrating profitable operations prior to COVID-19
- A business plan (or similar evidence) describing your strategy to export or contribute to an export supply chain
- A financial forecast demonstrating an ability to meet repayments which could include repayment sources other than cash flow (e.g. refinancing).
Eligible organisations will also need to supply information to comply with our policies in relation to:
- Anti-money laundering and counterterrorism financing
- Environmental and social risks
- Relevant international obligations.
Eligible applicants can access between $250,000 and $50 million as part of the fund.
Security requirements will be assessed on a case-by-case basis. In addition to loans, Export Finance Australia provides a range of financial solutions to meet organisation needs, including:
- Guarantees to your bank when you need additional security
- Bonds to help you fulfil the terms of your export contract.
Repayment requirements are up to two years for loans and three years for guarantees and bonds with a competitive, commercial interest rate depending on the risk profile of your organisation and debt servicing capacity. Deferrals of principal and interest repayments may also be available, depending on your circumstances.
The Government is providing substantial assistance to enable banks to support current and new customers at this time. If you have an existing bank or FinTech relationship, Export Finance Australia encourages you to try and gain finance with them first as this may be easier and simpler. Export Finance Australia can provide loans directly or alongside your current bank.
For loans and guarantees under $5 million, the expected turnaround time is 10 business days from receiving all relevant information. This extends to 15 business days for loans and guarantees above $5 million. More complex applications may take longer to assess.
The application process is relatively simple. Fill out an online contact form as an expression of interest and wait for Export Finance to contact you to identify the required services.
For further information on the COVID-19 Export Capital Facility and how it can help your business, please contact a member of our Debt Advisory Team.
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