WA-based SME businesses are starting to see the benefit of rising reinvestment in resource and energy projects, according to Cameron Hall of the Australian Government’s export credit agency, Export Finance Australia.
“The project owners in the mining and oil & gas sectors have started to commence their capital investment, and this is starting to trickle down to WA businesses,” says Cameron.
While this increase in activity is great for business, it does add to the challenge of managing cashflow and accessing credit.
“The WA mining and resources decline over the last few years definitely created the conservative lending sentiment that still covers many credit providers in WA today. Needing additional working capital to deliver on projects is critical,” says Cameron.
He says that’s where Export Finance Australia can make a difference.
“Export Finance Australia operates on a commercial basis, helping businesses to realise export opportunities. We provide a range of finance solutions to established Australian businesses that are exporting directly or part of an export supply chain. This includes finance for working capital, capital expenditure, and overseas direct investment opportunities.”
Export Finance Australia also has strong relationships with the major banks in WA and can partner with them in providing complementary finance solutions to their customers.
“We find that a lot of businesses operating in the mining services and oil & gas sectors are required to put up contract bonding in the form of bank guarantees. These bonds generally require 100% cash security from banks, unless the business has enough traditional collateral to secure a bonding facility. This can tie up a significant portion of working capital needed to deliver on contracts.
“At Export Finance Australia we don’t require 100% cash security for these bonds. We’ve played a fundamental role in helping WA businesses with their bonding requirements that they otherwise wouldn’t be able to obtain through banks because of the required security.”
Cameron says Export Finance Australia had the capability to provide an extra level of support to Australian businesses operating in overseas emerging markets.
“Export Finance Australia’s economists have extensive experience in country risk assessment, and our financial experts, who are ex-commercial bankers, have a lot of experience in international trade.”
For businesses requiring financial support for their contracts, Cameron says they need to have an in-depth understanding of their business financial accounts and cash flows: “The ability to provide detailed financial information paves the way for a smooth and efficient credit application process.