Exporting to Grow Your Clients' Business - And Yours
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The (bank) and EDC have worked together for many years. We have helped build your business by providing you with financial support and insurance which allow you to grow your clients’ business and your own.
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Exporting to Grow Your Clients' Business - And Yours
- 1. EDC and the (Bank name) partnership
- 2. Agenda • Who we are • EDC and you • Why exporters? • How EDC can help
- 4. Type of policy Previous year operations Previous year number of clients Repeat of current year Working Together: EDC and Bank X <name of bank>
- 5. The EDC (Local branch name)
- 6. Type of policy Previous year operations Previous year number of clients Repeat of current year Working Together: EDC and Bank Branch X <name of branch>
- 30. North America $60.8B (58.3%) Asia-Pacific $16.5B (15.8%) Europe $13.9B (13.3%) South / Central America $7.7B (7.4%) Africa / Middle East $5.2B (5%) % = percentage of EDC’s total business facilitated MOSCOW RUSSIA 17 OFFICES ACROSS CANADA MONTERREY MEXICO MEXICO CITY MEXICO BOGOTÁ COLOMBIA LIMA PERU SANTIAGO CHILE ISTANBUL TURKEY LONDON UNITED KINGDOM DÜSSELDORF GERMANY RIO DE JANEIRO BRAZIL SÃO PAULO BRAZIL JOHANNESBURG SOUTH AFRICA MUMBAI INDIA DUBAI UAE NEW DELHI INDIA SINGAPORE SHANGHAI CHINA BEIJING CHINA JAKARTA INDONESIA
- 31. What’s new at EDC: optional slide text here
Notes de l'éditeur
- The (bank) and EDC have worked together for many years. We have helped build your business by providing you with financial support and insurance which allow you to grow your clients’ business and your own.
- Today we’re going to talk about who EDC is and how we can help grow your clients’ business, and yours. We’ll touch on why you should work with exporters, and give some examples of how EDC has partnered with you to help companies work through their challenges and achieve success.
- <<In presentation mode, click the image to play the video on youtube>>
- For example, we worked on….for…and accomplished…
- We’ve also worked successfully with your branch. And while every bank and branch is different, we can see many opportunities to enhance our partnership and expand growth.
- As you can see, we've worked on...for...and...accomplished...together. And we could work together to… (AM to call out growth opportunities) This presentation will give you more information about exporters, how we can do more to help your business, your clients’ business and about EDC.
- Working with companies that sell outside of Canada is a good way to build your business, because they can do more to drive your volume and profitability. Compared to non-exporters, those clients will earn you more revenue, have an ongoing need for your bank’s support in their growth, and can utilize your international services to drive additional revenue.
- We know exporters do better – according to a recent Deloitte study, companies that export: • Generate 121% more revenue • Are 25% more innovative • Experience 20% less risk That means they can grow faster, and last longer – and their growth can fuel your growth.
- Peter predicts that there is more growth opportunity for companies outside Canada than inside. In fact, GDP growth worldwide is forecast to be 3.5%, much higher than in Canada at 2.4%. And emerging markets are forecast to grow at 4.0%, so this is a good time to look to exporting – both direct and indirect – to grow your clients’ business, and yours.
- There’s more than one way to export. Your clients can sell directly or indirectly. Indirect exporting happens when companies/distributors buy products & services from local companies, and resell them to customers in international markets. Indirect selling can be a great way to build business when your clients don’t have contacts in, or extensive knowledge of, an international market. Another example of indirect exporting is selling to a large company that, in turn, sells to international customers (for example, supplying services or products to major Canadian energy or mining projects whose outputs are intended for export). Suppliers then become part of the export value chain, without ever leaving home. However your client is exporting, EDC can help.
- If you have a client, large or small, that is currently or will be building their business internationally, we can help. We have a range of guarantees and insurance that can enable you to work more with your clients and help increase their global sales, reduce their risk and also help you achieve your business goals. EDC doesn’t just work with large corporations. We can help you support companies when they need it the most – at the moment they start exporting. There is no minimum size for EDC. For example, if an exporter needs to release the collateral taken on its operating GR for a $20,000 letter of guarantee, we can do it. We understand the needs and concerns of small and medium enterprises, and know that, for them, an additional $20,000 in their working capital is a big deal. Here are a few other examples of how we’ve helped banks like yours support their clients.
- EDC provides financing and support for companies in all types of industries, including those that don’t produce tangible goods, such as the service and IT categories. Here’s one example of how we worked with a bank to support a small IT company. This business was founded in 2012 and offers analysis and diagnostic services, and creates software adapted to the transportation industry.
- This company had a potential contract with a new customer in the United States. However, their customized service contract involved significant non-recoverable expenses.
- What they needed was a way to mitigate non-payment risks and project-related costs (e.g. labour, travel expenses). The contract was valued at US $35,000 for a duration of three months with terms of net 30 days following report delivery.
- The solution? EDC worked with their bank to provide them with contract insurance covering receivables and work in progress in case of contract cancellation by the customer. The pricing was a premium as a percentage of the contract amount.
- Working with EDC and their bank gave the company the ability to margin at 90% of work in progress and receivables, allowing both the bank and their clients to grow their revenue and business as a result.
- Here’s another example of how working together can help. This young company specializes in the manufacturing of electronic parts, with sales of $2 million including 10% of those sales as exports. They had an average credit rating.
- The company had just won a major contract worth $750,000 in the United States with terms of 10% upon signing and the balance to be paid on delivery.
- They needed to support the work in progress for the contract, and also required financing before the delivery of goods.
- Working with the bank, EDC provided a default loan guarantee for up to 75% of the $500,000 specific credit line, with a calculation of the borrowing limit based on 65% of U.S. receivables or 90% of accounts receivable insured by EDC, with 100% of the work in progress and 100% of inventory. The $500,000 credit line amount had a 75% guarantee rate with 100% anticipated use at (EDC commission rate) for 12 months. The security interest included equal ranking and first priority mortgage on financed assets related to the contract.
- Collaborating with EDC resulted in both the bank and its client increasing revenue. The bank also increased its capacity and client base with EDC sharing the risk on the loan. The client was able to satisfy their customers, allowing them to grow their business in tandem with the bank’s business.
- Here’s one more example of how collaborating with EDC can help build your – and your clients’ – business. This company is a custom parts manufacturer with 30% of its business coming from outside Canada.
- The company had just won a major AED (Arab Emirates Dirham) 4 million contract with a company in Dubai. The contract was to be carried out over an 18-month period and included an advance payment and performance guarantee of 20% upon signing the contract. The balance was due once the installation was completed, with a 12-month performance guarantee.
- The client required an advance payment guarantee, which the customer required to cover manufacturing costs. The manufacturing costs were in CAD, and the sales price was in AED. The contract period was for 18 months, and the availability of assets was utilized as security. There were also issues related to the volatility of the market. They needed both working capital – a $1.6 million credit line with use of a 55% “average” risk rating – and a way to protect profits from foreign exchange risks.
- The bank worked with EDC to provide them with a margin loan for the $1.2 million performance security to cover both credit lines.
- With the support of EDC, the company received credit lines at 100% and a 100% guarantee on the foreign exchange facility that was put in place by the bank. With EDC’s help, the bank also increased its capacity and client base and reduced the risks while supporting its clients’ business, allowing them to grow.
- EDC can help you do more with your clients and achieve your business goals – and that includes getting lower fund costs. When you have an EDC facility guarantee, your fund costs are based no longer on your client’s credit rating but instead on EDC’s, which is rated Triple A. The better the credit rating, the lower the fund cost. As a result, the facility’s profitability increases and your risk decreases.
- If your export client is looking for any of the following products or services, including: • An operating line of credit • A term loan • A standby letter of credit or letter of guarantee • A way to offer customers financing options • Export letters of credit We can help you support them. EDC solutions complement the services and support your bank provides, so that you can say ‘yes’ to your exporting clients more often, and support their exporting needs.
- We can also help you help your clients build their business and minimize their risk with our products and services, including: • Credit insurance • Financing • Market knowledge • Global connections
- EDC is Canada’s leader in financing and risk management abroad. We are the expert on international markets – we can help companies making their first sale in the United States all the way up to international companies increasing market share in countries around the world.
- Finally, I'd like to tell you about some exciting new initiatives at EDC, and how they can benefit both your bank and your client's business. (The script will include new service offerings, changes in current service, new offices and partnerships, and new products such as Foreign Funds Insurance and SB Stretch.)
- There are many ways EDC can help you add capacity and grow your business with your clients. Contact us and find out how we can help your bank: • Provide better service and support to your export clients • Say yes more often to your clients • Keep and grow your exporter client base • Minimize your risks • Tap into EDC’s experience and expertise in global opportunities and risks With our support, your clients will see you as an Account Manager who wants to help them grow their business. They will recognize that your ability to bring in EDC, a leader in the field of exporting, to help advise them is a key advantage. Utilizing EDC is also a good way to protect you from competition; after all, if you don’t offer this service another bank will. It’s also important to note that you maintain the relationship with your client. EDC has a long history of working with international and domestic banks and we are here to provide you with support and build your business – but your clients will always remain your clients. Whatever you need, give us a call. We have solutions for virtually every exporting customer, and we’re always happy to hear from you.