Australia’s Export Credit Agency Set to Help the Nation’s Exporters

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Export Finance Australia (EFA), the nation’s export credit agency, is gearing up to help more Australian companies explore potential businesses outside the country and eliminate their number one challenge.

As the world reopened, many Australian businesses have resumed exporting their products and services. Australian companies have exported to over 230 markets, generating a total value of goods and services of $458.8 billion in the 2020-2021 fiscal year. Exports have contributed a big chunk to the country’s economy and have employed more than 3 million Australians.

However, according to research conducted by EFA, the most common challenge Australian businesses face is securing financing capabilities to explore exporting opportunities. The challenge EFA is trying to solve is to provide opportunities for small and midsize enterprise (SME) businesses to gain export credit. SMEs comprise around 88% of the country’s exporters, yet achieving the resources they need to succeed is challenging.

Malcolm Lack, director for Alchemy Cordial, noted, “Exporting is not ‘instead of’ it’s also ‘part of’. Businesses need to consider exporting an extension of their current business, not a separate part. Their domestic business has to be well established with enough cash flow to sustain itself. Then it can support export activities.”

EFA’s mandate from the government is to offer commercial finance for SMEs where market gaps exist. Many SMEs need help breaking into new markets and setting up overseas operations to diversify their offerings, which is an integral key to success. Foreign prime minister Penny Wong states diversity is vital to maintaining the country’s economy.

Wong added, “Ensuring we diversify our export markets is important to national resilience. The government will continue encouraging that because we want to ensure diversified export markets.”

As the government intends to help more SMEs put their foot on the global door, EFA offers several services, such as loans, bonds, and guarantees. There are also several initiatives the government has put in place to help SMEs progress further. Treasurer Jim Chalmers recently announced the Small Business Energy Incentive Program. The program will provide tax cuts of up to $20,000 for SMEs who would invest in more energy-efficient equipment and allow them to repurpose their savings towards export efforts.

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