If your business needs finance to support your export transactions and your bank is unable to help, an export loan could be the answer to cover your cashflow needs. The Australian Government Export Finance and Insurance Corporation (Efic) loan is designed for businesses that have export contracts or purchase orders with buyers overseas but are unable to get a bank loan to take advantage of the contract opportunity.
Eligibility for the small business export loan
To be eligible, your business must:
- Be an Australian registered company with an annual turnover of $250K-$10 million
- Have been trading for at least two years
- Have made a net profit in the last financial year and/or have a projected net profit for current financial year.
The loan must be used to finance export-related transactions which can include international tourism and online sales to international customers. The goods or services that you are exporting can be made up of Australian-owned intellectual property, services or product design, or components and raw materials manufactured or produced in Australia. Labour and manufacturing costs should be incurred in Australia.
The export loan has some useful features including:
- Flexible 3-12 month loan terms to suit your cash flow
- Fixed interest rate for easier budgeting
- Apply online with quick access to funds. Formal approval takes around eight business days with funds available one day later
- The option to receive conditional approval (valid for 90 days) while you wait for purchase orders or export contracts to be finalised.
- No security of property or other fixed assets required
Note that Efic will only approve a loan if your bank is unable to provide funding to support your export contracts. Find out more about interest rates and how to apply on the Australian Government Export Development site.
Other support for exporters
Export development grants are also available to Australian businesses developing overseas markets. See our article on Export Development Grants for eligibility criteria and the expenses which can be claimed.
Accru Felsers specialises in helping businesses expand overseas and has been working closely with our Asia-based CPAAI firms for many years to help clients take advantage of business opportunities throughout the Asia-Pacific.
Our www.accruasia.com website showcases our partners and work in the region. Please get in touch if you would like to know more.