EFIC has given a $1 million export working capital guarantee to Sydney-based company Viocorp, as part of its recent agreement with ANZ.
Export Finance and Insurance Corporation (EFIC), the Australian Government’s export credit agency, is assisting Viocorp, a provider of digital media products and services for the internet, to finance a A$5.4 million sub-contract project in Malaysia, as part of its Master Working Capital Guarantee Facility agreement with ANZ. EFIC is providing a five-month export working capital guarantee to ANZ, so that the bank is then able to lend the same amount to Viocorp to assist in financing the company’s sub-contract works.
The guarantee is important as most of the early work completed by Viocorp involve a substantial cash investment by the company. However, under the sub-contract, Viocorp will only receive periodic payments from its customer. The mismatch between costs and payments under the sub-contract means that the company faces a working capital shortage and needs additional funding to perform the sub-contract.
The guarantee given by EFIC meant that the company was able to accept the project, Viocorp’s Executive Chairman, Ron McCulloch.
“Without EFIC’s support to help us access additional working capital, it would have been extremely difficult for Viocorp to undertake this contract and continue expanding our business overseas,” said Mr McCulloch.
A shortage of working capital to fulfill a new export contract is a difficulty faced by many SMB Australian exporters, according to Andrea Govaert, EFIC’s Executive Director, SME.
“Viocorp is a fast-growing, innovative Australian business and EFIC is happy to support the company as it now moves into the international market,” said Ms Govaert.
ANZ and EFIC agreement can support pre- and post-shipment finance across a wide range of industries.