EDC — Account Performance Security Guarantee
Highlights
This program is designed for businesses like yours to help free up working capital. By using the Account Performance Security Guarantee, you can issue letters of guarantee without tying up your cash or freezing your credit line. This means you can keep your funds available for other important business needs.
Key Benefits:
- Unlock collateral: No need to tie up your assets, giving you more cash to invest in growth.
- Increase business volumes: With more available capital, you can take on more projects and expand your operations.
- Negotiate better terms: Secure more favorable payment schedules with suppliers, improving your cash flow.
- Protect profit margins: Predefined rates allow you to price contracts accurately and maintain profitability.
- Enhance creditworthiness: Quickly respond to customer requirements, boosting your reputation and ability to secure new contracts.
Qualifying for this program is straightforward, and approval can significantly enhance your financial flexibility. This is a valuable opportunity to manage your working capital more effectively and support your business growth.
Financing Details
Type of Financing: Loan
Repayment Terms and Interest Rates:
- The loan offers a repayment term of up to 10 years.
- Interest rates are competitive and fixed at 5% per annum.
Eligible Expenses:
- Purchase of new or used equipment.
- Leasehold improvements.
- Working capital for day-to-day operations.
- Intangible assets such as patents and trademarks.
Ineligible Expenses:
- Personal expenses.
- Real estate purchases.
- Debt refinancing.
- Dividends or bonuses to owners or employees.
Fees:
- Application fee of $150.
- Annual maintenance fee of 1% of the outstanding loan balance.
- No prepayment penalties.
Qualifications
- Must have total business annual sales within one of the following ranges:
- $1 - $499,000
- $500,000 - $999,999
- $1,000,000 - $9,999,999
- $10,000,000 - $49,999,999
- $50,000,000 - $299,999,999
- $300,000,000 and above
- Must be currently invoicing a company outside of Canada, or:
- Have a new contract or an export plan with a company outside Canada
- Be invoicing a company in Canada for goods/services that are then resold outside of Canada
- Be currently investing in business opportunities outside Canada
Must currently have letters of guarantee issued or plans to use them in the future, or:
- Not currently utilizing letters of guarantee but plan to issue one in the future
- Not aware of or haven’t utilized letters of guarantee but interested in learning more
Disqualifications:
- No current sales / Start-up
- Not currently invoicing a company outside Canada and no plans to export or invest outside Canada
- No plans to issue letters of guarantee in the future and no interest in learning about them
Description
This program helps your business issue letters of guarantee without tying up your cash or credit line. You can use this to free up your working capital, allowing you to invest in other areas of your business.
You can receive 100% coverage for various types of guarantees, including bid, performance, warranty, and supplier guarantees. This means your financial institution can issue these guarantees without requiring you to put up collateral.
The benefits to your business are significant:
- Increase business volumes: With more cash available, you can invest in growth.
- Negotiate better supplier terms: Secure more favorable payment schedules.
- Protect profit margins: Anticipate costs and price contracts accordingly.
- Manage working capital: More flexible customer payment schedules.
- Decrease bid response times: React to bids quickly with reduced administrative burden.
- Enhance creditworthiness: Meet your customers' requirements easily.
This program is a great opportunity to unlock your business's full potential by freeing up your capital and improving your financial flexibility.
Program Steps
Create an Account on MyEDC:
- Visit the EDC website and create an account on MyEDC. This will give you access to the application portal and other resources.
Log In to Your MyEDC Account:
- Use your credentials to log in to your MyEDC account. Navigate to the section for the Account Performance Security Guarantee.
Prepare Required Documentation:
- Gather the necessary documents to support your application. These include:
- Financial statements (balance sheet, income statement, cash flow statement)
- Business plan
- Details of the letter of guarantee (e.g., bid, advanced payment, performance, warranty, lease, supplier, regulatory)
- Information on your company's managerial, technical, and financial capabilities
- Economic outlook and customer profile
- Gather the necessary documents to support your application. These include:
Complete the Online Application Form:
- Fill out the online application form available in your MyEDC account. Provide all required information accurately.
Submit the Application:
- Review your application for completeness and accuracy. Once satisfied, submit the application through the MyEDC portal.
Coordinate with Your Financial Institution:
- Inform your financial institution about your application. EDC will work with your financial institution to set up the Account Performance Security Guarantee.
Await Approval:
- EDC will review your application and documentation. They may reach out for additional information or clarification.
Receive the APSG Offer:
- Upon approval, EDC will issue an APSG offer to your financial institution, transferring the collateral requirement and risk to EDC.
Finalize Terms with Your Financial Institution:
- Discuss and finalize the terms of the APSG with your financial institution. Ensure you understand all aspects of the agreement.
Utilize the Guarantee:
- Once everything is in place, you can start issuing letters of guarantee without tying up your capital, allowing you to expand your business.