EDC — Foreign Exchange Facility Guarantee
Last Update: January 24, 2025
Canada
Free up collateral held against your foreign exchange contracts
EDC — Foreign Exchange Facility Guarantee at a glance
Eligible Funding
- No Condition
Timeline
- Open Date : July 9, 2024
Financing Type
Other Support
Eligible Industries
- Manufacturing
Grant Providers
- Export Development Canada (EDC)
- Government of Canada
Status
Open
Overview of the EDC — Foreign Exchange Facility Guarantee program
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
Financing terms and conditions
This grant offers a Foreign Exchange Facility Guarantee, helping businesses manage foreign exchange risks while maintaining working capital flexibility. It provides a robust framework for hedging against currency fluctuations without tying up resources.
- Coverage for up to 100% of the collateral or margin requirement set by financial institutions for foreign exchange derivative contracts.
- Support for contracts with durations of up to three years, enhancing long-term financial planning.
- No requirement for collateral provision by the business for securing foreign exchange contracts.
- Delayed margin call requirements, improving cash flow management for businesses.
- Access to advanced foreign exchange hedging tools by covering necessary working capital.
Eligible projects & activities
Examples of admissible projects:
$ 30,000
Implement sound foreign exchange hedging strategy for a tech startup
$ 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
$ 70,000
Mitigate foreign exchange risk for an import-export business
$ 50,000
Stabilize FX risk for an agricultural cooperative
Eligibility criteria of the EDC — Foreign Exchange Facility Guarantee program
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.
Who is eligible?
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.
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.
Eligibility criteria of the EDC — Foreign Exchange Facility Guarantee program
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
How to apply to the EDC — Foreign Exchange Facility Guarantee program
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.
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.
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.
4
Contact EDC for personalized support
Reach out to EDC's contact number or email for further assistance in implementing a tailored strategy.
Additional information
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.
Contact Export Development Canada (EDC)
example@edc.ca
1-800-229-0575
Apply to this program
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