OTTAWA, June 19 /CNW Telbec/ - Export Development Canada (EDC) has
introduced enhancements to its Export Guarantee Program aimed at further
encouraging financial institutions to advance loans to small- and medium-size
enterprises (SMEs) in Canada. These program changes will help SMEs access
financing from their financial institutions in support of Canadian exports and
"We have been working closely with our partners in the Canadian banking
sector to revise the Export Guarantee Program to ensure that it continues to
meet the evolving needs of both SMEs and the banks," said Eric Siegel,
President and CEO of EDC. "These improvements should increase access to
trade-related financing for more companies and should be of help to Canada's
manufacturers, particularly those in the automotive sector."
A number of changes have been made to facilitate the ease of use of the
program by financial institutions. As highlighted in the Government's 2008
federal budget, a key change to the program is the availability of more
coverage to financial institutions from EDC for guarantees valued at $500,000
or less. EDC has increased coverage for these transactions from 75 per cent to
up to 90 per cent. For guarantees valued between $500,000 and $10 million, EDC
has increased the availability of coverage to up to 75 per cent for all
transactions, where previously coverage was limited to 50 per cent for certain
types of transactions.
Canadian Direct Investment Abroad (CDIA) is important to Canada's
capacity to trade, yet presents greater risks. Recognizing this, EDC will now
consider providing up to 100 per cent coverage for CDIA-related qualifying
facilities as part of a larger package of bank credit provided to a company to
support foreign investments.
The enhanced program also has more flexibility to accommodate a broader
range of client needs such as: financing support for single and multiple
export contracts; financing of work in progress and the purchase of equipment
related to exports; margining of foreign-domiciled inventory; margining of
receivables created under the federal Scientific Research and Experimental
Development (SR&ED) tax program; and, the margining of foreign accounts
Since 2003, the Export Guarantee Program has quadrupled in size in terms
of companies served. In 2007, approximately 200 SME companies were served and
guarantee coverage valued at over $230 million was provided in partnership
with Canadian financial institutions. More than 30 financial institutions have
taken advantage of the program to help meet the needs of their clients.
EDC is Canada's export credit agency, offering innovative commercial
solutions to help Canadian exporters and investors expand their international
business. EDC's knowledge and partnerships are used by nearly 7,000 Canadian
companies and their global customers in up to 200 markets worldwide each year.
EDC is financially self-sustaining, is a recognized leader in financial
reporting and economic analysis, and has been named one of Canada's Top 100
Employers for seven consecutive years.
For further information:
For further information: Media contact: Phil Taylor, Export Development
Canada, Tel: (613) 598-2904, Blackberry: firstname.lastname@example.org