Export finance empowering SMEs to ‘scale quickly’

Export finance empowering SMEs to ‘scale quickly’

Bank funding has burnt many business owners, but as one operator reveals, securing funding for export purposes is much less painful for growing businesses.

“For us, we found it very accessible; it’s very straightforward,” says Anton Pemmer of sports bottle manufacturer Bottles of Australia.

“Obviously you pay an interest rate to do it, but for us, when we don’t know what’s coming, it actually gave us the chance to then predict if sales went to a certain level, we would have no problem to be able to finance it.”

As Anton explains on the My Business Podcast, Bottles of Australia didn’t set out to export, but found itself doing so accidentally. And it wasn’t until years later, as export volumes increased, that his business turned to government-owned export finance provider Efic for funding.

“One of the reasons we did was we had the opportunity to supply Puma as a global brand, and not knowing what the order size capacity would be, as far as how high the orders were, and then having to fund that, and then having to fund it for 60 to 90 days, as well as trying to keep your suppliers happy for the product.”

Anton says that the difference between securing export finance and more traditional types of funding, like bank loans, is what the funding is leveraged against.

“It’s financed against orders [that] have come through,” he explains.

“First, they want to know who you are, as the supplier, then they want to know who the customer is.

“If you’re supplying an unknown business that has been existing for five minutes, it may be a bit harder. But when you’re supplying major brands, and most Australian exporters are going to be targeting major brands or major corporations, then it enables you to scale very quickly.”

Due to the fact that export finance is funded against secured orders, Anton says that it has no impact on existing credit facilities, and you have considerable flexibility in choosing the payment terms.

“You can pick whether you want that finance for 30 days, 60 days, 120 days – whatever works for you, and whatever’s based against the terms that you’re dealing with that corporation,” he says.

Listen to more first-hand exporting tips, tricks and traps from Anton on the My Business Podcast below:

Export finance empowering SMEs to ‘scale quickly’
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