Export Guarantee Program (EDC)
The Export Guarantee Program (EGP) is an Export Development Canada (EDC) program that gives a company’s financial institution a guarantee so the institution can extend the company’s access to working capital. EDC says it transfers a portion of the institution’s risk to EDC, allowing the institution to increase its financing.
A buyer of an exporting business, or the buyer’s bank, may meet this program if a lender will not provide enough working capital alone. EDC says the program is best suited for complex export finance structures, including multiple operating lines, foreign assets or acquisitions, cash flow loans or multiple borrowers.
How EDC describes it
EDC says the guarantee can be applied to both operating lines and term loans. An EDC white paper adds that the company and its bank must work together to apply, that the bank must be willing to set up a loan for the company, and that the company provides financial statements to support the application. The white paper dates from 2014, so check EDC’s current page.
What to ask
- Does the lender intend to apply for an EGP guarantee, and what will it ask the company to provide?
- Does the guarantee support working capital only, or can it support part of an acquisition?
- What maximum does EDC currently publish, and what part of the loan does it cover?
See stacking CSBFP, BDC and credit union loans and the entry on an operating line of credit.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Export Development CanadaGovernmentExport Guarantee Program
- 02Export Development CanadaGovernmentBoost Your Working Capital with EDC’s Export Guarantees (white paper)
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