Andrew Watson, Executive Director, SME at Efic, looks at how the government organisation is providing finance options for SMEs that export their products or services.
While Australian SME exporters continue to win contracts against global competitors, many find it difficult to access the finance they need to secure these opportunities.
The good news is that recent legislative changes have improved this situation and will allows us to help more SME exporters access the finance they need to succeed overseas.
Helping more SMEs
In response to these legislative changes, Efic has introduced a new flexible loan product called the Export Contract Loan, which will make it easier for SME exporters, and those in export supply chains, to access the finance they need when their bank is unable to help.
Efic’s Export Contract Loan has a streamlined application and approval process, which could save every SME that applies significant fees and processing time. Designed with the needs of SMEs in mind, this new loan product is aimed at those exporters and export supply chain participants needing export related finance between $100,000-$500,000.
An Australian success story
A number of SMEs have already benefited from Efic’s new Export Contract Loan, the first being Unison Joints, a Queensland-based manufacturer of expansion joints.
Unison’s loan was approved just a few days after the product was launched, helping it to secure a high-profile supply contract in Saudi Arabia. Despite being well-known locally and having a strong reputation for delivering on international projects, Unison’s bank required more tangible security before it would approve any additional funding – money that was needed to meet the contract’s significant upfront material and labour costs.
Unison’s experience isn’t unique, as many SMEs struggle to obtain finance from their bank, as they often lack the necessary collateral – like ‘bricks and mortar’ assets or inventory – that the banks need to extend their current funding arrangements.
A bright future for Australian SMEs
SMEs continue to be the backbone of the Australian economy, providing employment to 70 per cent of the Australian workforce and accounting for 60 per cent of national income.
The March 2015 results of our SME Exporter Sentiment research show that, for those SMEs surveyed, exports now make up 16 per cent of total revenue, with this forecast to grow by another four per cent in the next 12 months.
We’re excited that we will be able to support even more SME exporters with a loan that is tailored to their needs, helping them to win more export contracts and grow internationally.
For more information visit www.efic.gov.au/client-solutions now.
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