Travelex and EFIC expand SMEs foreign exchange trading lines
In light of a tighter credit market for small business, Travelex Global Business Payments has doubled the foreign exchange trading lines offered to SMEs involved in exporting.
An expansion of the March 2010 foreign exchange facility guarantee between the Australian Government’s Export Finance and Insurance Corporation (EFIC) and Travelex means eligible SMEs can now access more hedging facilities with a face value of up to $2 million with no need for a deposit.
This expansion is targeted at SMEs with annual turnovers of less than $10 million. These exporters are often unable to negotiate an increased facility because they do not have the necessary security.
“Foreign exchange risk management products often require security from the SME, usually in the form of cash deposits…(many) are unable to adequately hedge their contracts because they have reached the limit of existing facilities and don’t have sufficient security for an increase,” Travelex Global Business General Manager of Mid Market Simon Glendenning said.
According to Glendenning, these increases also provide certainty for SMEs over the value of their invoices and their long-term profitability.
EFIC’s Executive Director of SME and Mid-Market Andrea Govaert said they work with SMEs that have “innovation, drive and professionalism- (that) are often restricted by the amount of collateral they can offer to underpin the growth of their business.”
The increased facility gives SMEs the ability to protect more of their profit, and provide headroom if they win new customers and want to hedge some of these sales.
To find out if your SME is eligible for this free service you need to become a Travelex customer and meet the associated criteria.