Also called export credit agency, receivables insurance
What is Export Development Canada?
Canada’s export credit agency, which insures you against a foreign customer not paying and helps finance export sales.
What else it is called
- Other names
- export credit agency, receivables insurance
- In French
- Exportation et développement Canada
Related entries
Understanding export Development Canada
A Crown corporation whose job is making export sales possible for Canadian companies. The service most used by manufacturers is receivables insurance: cover against a foreign buyer failing to pay, whether through insolvency or through political events in their country.
The second-order benefit is often larger than the first. Banks lend more readily against insured foreign receivables than uninsured ones, so a company that insures its export book can frequently increase its operating line without additional security. For a manufacturer whose growth is limited by working capital rather than by orders, that is the practical reason to look at it.
It also provides bonding. Foreign customers and projects commonly require performance bonds or letters of guarantee, which tie up a company’s bank facilities if arranged conventionally.
In practice
If you are turning down export orders because the credit risk is too concentrated in one customer, that is the specific problem this solves.
Frequently asked
Is this only for large exporters?
No. Small and medium manufacturers make up most of its customers, and there are products scaled for companies insuring a handful of foreign accounts rather than a global book.