On 4 March 2015, the Export Finance and Insurance Corporation Amendment (Direct Lending and Other Measures) Bill 2014 (Cth) (http://www.comlaw.gov.au/Details/C2014B00213) finally passed both Houses, with an Assent Date of 19 March 2015.
The Export Finance and Insurance Corporation (“EFIC”) (http://www.efic.gov.au/) is a government export credit agency that provides finance and insurance support to assist Australian exporters. EFIC receives equity funding from the Commonwealth, and provides finance and insurance products to eligible exporters. This regime allows exporters to access finance where the private market is unwilling or unable to provide finance.
Previously, the Export Finance and Insurance Corporation Act 1991 (Cth) (the “Act”) (http://www.comlaw.gov.au/Details/C2014C00532) only provided finance to exporters of “capital goods”. However the recent amendments to the Act have removed that requirement, and now EFIC is able to lend directly to exporters of all goods.
This provides additional assistance by the Government to Small Medium Enterprises (“SMEs”) looking to tap into overseas markets (an in particular, Asian markets).
SME exporters have already started benefiting from these amendments, with a Queensland-based manufacturer becoming the first SME exporter to benefit from these amendments.
While these amendments opens yet another opportunity for SME businesses to expand beyond their local borders, SME businesses should take the time to consider whether they are ready for this venture.
Some of the matters that owners of SME businesses may wish to look into before exporting include (without limitation):
- Contractual advice (including due diligence requirements, payment structure, jurisdiction for enforcement of unpaid debts, etc);
- Financial and Taxation Advice;
- Whether the supply is a GST-free export; and
- Structuring advice and asset protection.
Further SME Export and Funding Information
Corney & Lind Lawyers are able to help you with advice on some of the legal aspects taking your SME’s business overseas. Please contact our Business Development Manager to set down an Initial Meeting for preliminary advice today.
 Andrew Hunter, Efic MD provides further information on the new Export Contract Loan here http://www.efic.gov.au/news-room/latest-news/2015/march/new-lending-flexibility/