Export Development Canada – To Encourage Exports

Export Development Canada

Export Development Canada (EDC). Moreover, this is the export credit agency of Canada. Further, this agency is conducting through Canada’s Government (a Crown Corporation).

Most importantly, to support and develop Canada’s export trade thru helping Canadian companies. Likewise, responding to international business opportunities, Export Development Canada’s primary job. Similarly, these are a self-financing Crown Corporation. Finally, the government is running on the arm.

It aims to boost Canada’s economic growth. Export Development Canada supports the export and investment of domestic companies through a wide range of financial products. These products include insurance, guarantees, bond products and financial services. Insurance products protect Canadian exporters against the risks of foreign transactions. Above all, such as insurance and political risk insurance, which can reduce losses to domestic exporters. Thru, to non-payment and unreliable political risks. Committed to the standard of corporate social responsibility (CSR). It is an autonomous organization that relies financially upon. This is on interest and premium collection despite being run. EDC is thru, the Crown Corporation on behalf of the Government of Canada.

Export Development Canada has partnered with various private financial institutions to provide bonds, guarantees and financial products. Export Development Canada provides companies’ financial capability. And helps them find financing solutions by sharing risks with the private sector.

List of Export Development Canada Insurance Products:

1. Credit Insurance.
2. Contract Frustration Insurance.
3. Performance Security Insurance.
4. Political Risk Insurance.

Bonding and Guarantee Solutions of Export Development Canada:

1. Account Performance Security Guarantee.
2. Surety Bond Insurance.
3. Foreign Exchange Facility Guarantee.

Financing of Export Development Canada:

1. Export Guarantee Program.
2. Foreign Buyer Financing.
3. Foreign Investment Financing.
4. Customer Financing Guarantee.
5. Structured and Project Finance.

1. Credit Insurance

Receivable insurance is also commonly known as accounts Credit insurance. The credit protects the insurance company’s acceptable accounts and protects them against any customer’s default. To protect the company’s profit margins, this is the best way.

Why credit insurance?

• Transportation Construction Retail.
• Electronics Household Equipment Textile.
• Chemicals Computer, Telecom, IT, Food products.
• Metals Commodities Jewellery.
• Automotive Paper Services factoring.

Risks Implicated

1. Commercial Risk.

• Insolvency or bankruptcy of a customer.
• Non-payment from a customer.

2. Political Risk.

• Issues regarding transfer and currency conversion.
• The default of a public buyer.
• Contract frustration.
• Regulations or restrictions imposed by the government.
• Act of war.

Benefits Of Credit Insurance.

• Firstly, helps penetrate foreign markets.
• Secondly, reduces exposure to risks.
• Thirdly, enhances lending capacity which provides a competitive advantage.
• Further, helps in borrowing larger loans from the bank.
• Moreover, in the case of a lower lousy debt reserve, it helps.
• In addition, in tax-deductible insurance premiums, it converts provisions for bad debts.
• Enhances cash flow performance.
• Moreover, When the company’s larger portions of sales are focusing on a few customers, as a result, it helps spread risk.
• Further, indemnifies losses.
• Finally, helps prevent liquidity shortage.

2. Contract Frustration Insurance

To clarify, Contract frustration insurance is commonly known as public buyer default. Moreover, If you want to make sure everything goes easier when entering into an international agreement. Consequently, you should consider contract despair insurance. It compensates for up to 90% of eligible losses.

Most importantly, protect your business against political and commercial risks. Thru, contract frustration insurance will enable you to bid on more massive deals. In addition, enter new markets to follow new customers.

1. Coverage 

• Pre and post-shipment risk and non-delivery risk.
• License cancellation.
• Calling of performance guarantees and advanced payment.
• Restrictions on imports and export.

Key Benefits of Contract Frustration Insurance.

• Protects against the cancellation of a contract.
• Protects against customer default or bankruptcy.
• Free up working capital.
• Protects against cancellation or rejection of renewal of import or export permit by the government of Canada.
• Eliminates the political and commercial risk.

Qualification Criteria of Export Development Canada.

• International customer’s creditworthiness.
• Terms of contract.
• Value of exports.
• Capabilities to exporting goods and services.

3. Performance Security Insurance.

For example, suppose your business is active in a competitive international market. On the other hand, Export Development Canada can insure up to 95% of your losses if a customer accidentally fails to meet your obligations. Consequently, due to a letter of guarantee or specific political risk.

Eligibility based on Export Development Canada:

• Review the letter of guarantee.
• Terms and economic outlook and customer profile in your customer’s country.

4. Political Risk Insurance

Certainly, in today’s global market, most companies are aware of the potential benefits of exploiting opportunities in emerging markets. However, they are also careful of the risks posed abroad and under foreign jurisdiction.

Moreover, Political risk insurance protection can provide investors. As a result, financial institutions and corporate clients need to protect their investments in overseas markets. That is to say, against unforeseen losses due to the risk of certain political risks. Therefore, AIG’s political risk helps insurance companies sell during, invest or expand their products or services internationally. Moreover, confident of alleviating the political uncertainty of doing business abroad.

Benefits of Export Development Canada:

• Similarly, suitable coverage for a wide range of foreign businesses. It is including equity investments, physical assets, cross-border goods and contracts for goods and services.
• Likewise, long-term protection from the purchase of a non-revocable policy for a policy period of up to 15 years.
• The policy limit available for anyone’s risk is 120 million.
• However, underwriting under political risk is a career partner with more than 30 years of experience. Even is a member of the Burn Union. Accordingly during, an international credit and investment insurance company.

Coverage of Export Development Canada:

• In conclusion, Confiscation, confiscation or nationalization.
• Currency is not integrity and transfer.
• in short, Political violence (including terrorism and war).
• However, the frustration of the deal due to political events.
• Consequently, unable to return the equipment when the contract ends.
• Sovereign payment default.
• Guarantee of on-demand contract and wrong calling of bonds.

Reviews:

1. “I’m so glad I got a loan from a lender who help me with my loan. It was incredible how I got a $ 350,000 loan. I tried a different service, but I could never get a loan from this service. Some of them will ask me to fill in a lot of documents. And at the end of the day it will not end well. But I’m happy, after meeting with (Jeffrey Credit Union) I was able to get my loan of $ 350,000.00. Now my business is doing well and I want to let you know all this today. This is happening because it’s fast and 100% are reliable. Now I’m paying back the loan I got from the company” by “Jaye Tuti” from “Facebook“.
2. “Great people to deal with, very insightful. Once you insure with them and start to use their service. Then you will know the value they bring to the table. Keep up the good work team EDC Canada” by “Webb Wehbe” from “Facebook“.
3. “EDC helps all businesses. When I sell to any where in the world I can buy accounts payable insurance. On said fire in account that guarantees us our money. This is why because the customer does not pay. Customers will do market research for us. They invite us on market trips to various countries for marketing, the support is great. The customers do not cater only to the rich and giant corporations” by “Jack Belden” from “Facebook“.

References:

1. “In response to COVID-19. EDC has expanded its focus to help companies of all sizes with financial solutions and expert advice” by “EDC.CA“.
2. “Export Development Canada(EDC) | Export Credit Agency (ECA) in Canada” by “Trade Finance Global“.
3. “EDC ready to help Canadian businesses during Coronavirus pandemic” by “GlobalNewsWire“.

FAQ

1. Q: What is Export Development Canada? 

A: like Export Development Canada, it’s for export. Likewise, if you have some export accounts like in America; as a result,  you could use domestic also. However, also, you could ensure a domestic Canadian account. This is for, if you all need domestic in insurance. And after, if you do export, with insurance in domestic and export reports.

2. Q: What are the Export Development Canada Insurance offered Products?

A: They offer four main service packages. Credit Insurance, Contract Frustration Insurance, Performance Security Insurance and Political Risk Insurance.

3. Q: What is Credit Insurance?

A: Receivable insurance is also commonly known as accounts Credit insurance. To know more please scroll up in this article.

4. Q: What does Export Development Canada do usually?

A: Export Development Canada is mandated to support and develop Canada’s export trade.  And, respond to Canada’s capacity and international business opportunities to engage in that trade.

5. Q: What is Canada Account?

A: Meanwhile, the Canada account is using to support export transactions. Likewise, we are unable to help. The Minister of International Trade determines it in the national interest of Canada.

6. Q: Who is EDC’s shareholder?

A: The government of Canada is the sole shareholder.

7. Q: What are Canada’s main exports?

A: Crude oil, Cars, Gold (unwrought), Processed petroleum oils, etc.

8. Q: What foods does Canada export?

A: Above all, they export half of their beef/cattle, 70% of their soybeans. Similarly, 70% of their pork, 75% of their wheat, 90% of their canola and 95% of their pulses.

9. Q: What is Export Development?

A: That is to say, to encourage exports, the government helps small businesses in various ways. Similarly, they help increase the sales of products currently available for export. Likewise, this is called export promotion or export development and is usually conducted by a trade promotion agency.

10. Q: How can I export goods to Canada?

A: For instance, you need an arrangement of a bunch of documents. Similarly, Bill of lading, NAFTA Certificate of Origin, Packing list, Sales contract. Likewise, proforma invoice, AES filing, Customs declaration and Insurance policy.

11. Q: Is CRA and Service Canada the same thing?

A: Consequently, these are separate services provided by the two federal government agencies. Likewise, these are provided CRA tax information. Services Canada relates to EI CPP OS and other services.