On 4 March 2015, The Export Finance and Insurance Corporation (“EPIC”) provided a new opportunity for SME’s with the passing of the Export Finance and Insurance Corporation Amendment (Direct Lending and Other Measures) Bill 2014 (Cth).This bill passed both Houses, with an Assent Date of 19 March 2015.
As a government export credit agency, The Export Finance and Insurance Corporation (“EFIC”) provides finance and insurance support to assist Australian exporters. Eligible exporters who seek finance and insurance products are able to utilize this equity funding from EFIC through the Commonwealth. Exporters who previously found difficulty accessing funding through the private market are able to do so with this regime.
The recent amendments to the Act – Export Finance and Insurance Corporation Act 1991 (Cth) (the “Act”) allows EFIC to lend directly to exporters of all goods as previous requirements only provided finance to exporters of “capital goods”.
Small Medium Enterprises are already benefiting from these amendments as it provides additional assistance by the Government to Small Medium Enterprises (“SMEs”) as they look into tapping into the overseas markets (and in particular, Asian markets).
A Queensland-based manufacturer has benefited by becoming the first SME exporter to benefit from these amendments as it opens up yet another opportunity for SME businesses to expand beyond local borders.
However, 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 client engagement team 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/