Options and credit practices in
export financing Exporters doing business in unfamiliar territory can expect higher risk, and those additional financial and political risks may require extra financing. To develop a clear and concise export financing plan, you must assess a number of issues.
overseas investments. The Export Development Canada’s (EDC) Export Protect product insures transactions against nonpayment by foreign buyers. EDC will help collect your funds in cases of breach of contract, nonpayment, expropriation or political instability.
Payment guarantees Working capital Prospecting and operating in foreign markets usually requires a greater investment than the same operations would need at home. A single large order or many small orders from overseas can affect your productivity and inventory capacity, and in some cases, foreign buyers may request 22
longer payment terms, which can affect your working capital.
Political risk insurance Not all importing countries enjoy the political, social and economic stability to which we are accustomed in Canada. Special insurance policies are often necessary, particularly to protect
COMMERCIAL INVESTOR | Commercial Real Estate & Business Opportunities
You may be dealing with clients and intermediaries you hardly know, in an economic context that is foreign to you. Take extra precautions and expect complications, such as late payments and fluctuations in exchange rates. You should have a plan of action in place before such problems arise. EDC also offers loans or credit lines to foreign buyers to encourage them January 2–30, 2021
