EDC — Foreign Exchange Facility Guarantee
Canada
Free up collateral held against your foreign exchange contracts
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|openingDateNovember 14, 2019
grant_single|financingType
Other Support
grant_single|eligibleIndustries
- Manufacturing
grant_single|grantors
- Government of Canada
- Export Development Canada (EDC)
grant_single|status
grant_card_status|open
grant_single_labels|preview
You can manage FX risk by implementing a sound foreign exchange hedging strategy, which your financial institution or other FX provider can help you establish. A Foreign Exchange Facility Guarantee can replace their collateral requirement and free up your
grant_single_labels|projects
The Export Development Canada (EDC) Foreign Exchange Facility Guarantee is designed to mitigate foreign exchange risks for businesses. Eligible activities include developing foreign markets and ensuring price stability for international clients.
- Developing foreign markets
- Ensuring price stability for international clients
grant_single|admissibleProjectsExample
$55,000
Develop FX hedging strategy for a social economy enterprise
$25,000
Implement FX risk management for a nonprofit organization
$40,000
Establish FX hedging for a community development organization
$30,000
Implement sound foreign exchange hedging strategy for a tech startup
$70,000
Mitigate foreign exchange risk for an import-export business
$50,000
Stabilize FX risk for an agricultural cooperative
grant_single_labels|admissibility
Eligibility for the Garantie de facilité de change is determined by Export Development Canada (EDC) based on the following criteria:
- The administrative, technical, and financial competencies of the business.
- An evaluation of the business's foreign exchange risk hedging strategy.
- The terms of the foreign exchange facility agreement with the financial institution.
grant_eligibility_criteria|who_can_apply
The grant is available to Canadian businesses looking to protect their profit margins from currency exchange fluctuations through EDC's Foreign Exchange Facility Guarantee. There are no explicitly stated eligibility requirements in the provided context, but companies need to have sound administrative, technical, and financial capabilities, with an established foreign exchange risk management strategy, and comply with the terms of their financial institution's foreign exchange facility agreement.
grant_eligibility_criteria|eligible_expenses
The eligibility for the Garantie de facilité de change focuses on enhancing a company's currency risk management strategies and ensuring financial stability against currency fluctuations. The eligible activities are primarily concerned with financial strategies and tools related to foreign exchange risk management.
- Assessment and evaluation of administrative, technical, and financial capabilities for currency risk management.
- Development and implementation of strategic currency risk hedging plans.
- Agreement terms review with financial institutions for exchange facility arrangements.
- Development of plans to utilize guaranteed exchange rates for better pricing accuracy and cash flow predictions.
grant_eligibility_criteria|zone
The eligible geographic zones for this grant are all regions in Canada where the business operates. The eligibility is assessed based on the administrative, technical, and financial competencies of the company.
- All regions in Canada
grant_single_labels|criteria
There are evaluation and selection criteria for this grant. The eligibility for the grant is based on the managerial, technical, and financial capabilities of your company, review of your foreign exchange hedging strategy, and the terms of your financial institution's foreign exchange facility agreement.
- Managerial, technical, and financial capabilities of your company
- Review of foreign exchange hedging strategy
- Terms of financial institution's foreign exchange facility agreement
grant_single_labels|register
- Step 1: Determine eligibility
- Assess your company's administrative, technical, and financial competencies.
- Review your company's currency risk management strategy.
- Evaluate the terms of your financial institution's foreign exchange facility agreement.
- Step 2: Acquire the guide
- Submit your professional email to receive the guide on optimizing foreign exchange risk coverage strategies.
- Agree to receive EDC's electronic newsletters, trade information, and promotional messages.
- Step 3: Read the guide and understand content
- Comprehend the various instruments for foreign exchange coverage.
- Learn how to develop a strategic coverage plan to protect and grow your business.
- Step 4: Contact EDC for personalized support
- Reach out to EDC's contact number or email for further assistance in implementing a tailored strategy.
grant_single_labels|otherInfo
There are some additional points to note about the Garantie de facilité de change by EDC:
- The use of this guarantee allows for setting fixed exchange rates in advance, enabling more accurate pricing of products and services.
- This guarantee may enhance borrowing capacity by allowing companies to enter into foreign exchange contracts without collateral, thereby encouraging financial institutions to offer loans secured by such contracts.
- It provides stability in cash flow management by setting thresholds, reducing the unpredictability of collateral calls related to foreign exchange hedging.
- Companies can access advanced foreign exchange hedging tools and engage in longer contract terms of up to three years.
- The guarantee is structured to help companies take advantage of market opportunities while protecting against currency risk volatility.
grant_single_labels|contact
example@edc.ca
1-800-229-0575
Apply to this program
Protect Your Business with EDC's Foreign Exchange Facility Guarantee
The Foreign Exchange Facility Guarantee offered by EDC provides robust protection against the uncertainties of currency fluctuations. Specifically designed to safeguard your profit margins and enhance cash flow predictability, this product ensures your business remains liquid and poised for growth amid volatile market conditions.
Understanding the Foreign Exchange Facility Guarantee and Its Benefits
EDC’s Foreign Exchange Facility Guarantee is a strategic financial instrument aimed at Canadian businesses engaging in international trade. Given the inherent risks associated with currency fluctuations, this guarantee offers a practical solution by securing your exchange rates without tying up your working capital. This aspect is particularly crucial for businesses looking to stabilize their operations while expanding their market reach across borders.
This guarantee is integral for organizations wanting to avoid the common pitfalls associated with unpredictable foreign exchange markets. By fixing your exchange rates ahead of time, your business can competitively price goods and services, leading to more accurate cash flow forecasts and better financial planning. Accurate forecasting ultimately empowers businesses to allocate resources more effectively, optimizing operational efficiency and driving growth.
One of the standout features of this guarantee is its ability to enhance borrowing capacity. With EDC's support, businesses can enter into currency contracts without requiring collateral, thus making banks more willing to extend loans against the concerned assets. This increased borrowing leverage can provide much-needed capital for innovation, infrastructure upgrades, or market expansion, fostering long-term business sustainability.
Moreover, the guarantee facilitates access to sophisticated hedging instruments, enabling businesses to secure longer-term currency contracts spanning up to three years. These instruments not only help in managing risk effectively but also offer the flexibility to use diverse products and risk parameters, thereby customize the approach to suit specific business objectives and market conditions.
EDC’s guarantee is particularly beneficial for businesses dealing with frequent currency-related cash margin calls. By setting a predetermined threshold, companies can mitigate the unpredictability of such calls, stabilizing their cash flow and allowing them to focus more on core business activities rather than financial contingencies.
In addition to transactional advantages, the Foreign Exchange Facility Guarantee offers businesses the peace of mind needed to explore new opportunities confidently. Enterprises can pursue global market development without the looming threat of adverse currency shifts that could erode profits or disrupt financial stability.
Another key aspect is its assistance in refining the strategic management of exchange rate risks. By working with EDC and leveraging their expertise, businesses can establish comprehensive risk management frameworks that align with their broader financial strategies and market ambitions.
Ultimately, choosing EDC's Foreign Exchange Facility Guarantee is not just about minimizing risk—it's about unlocking potential. By fortifying your financial strategies with this guarantee, your business is better positioned to take advantage of global commercial opportunities, improving resilience in the face of an increasingly unstable economic environment.
