Canada Exports is a distributor of Canadian products to the International market.
Who is Canada Exports?
Canada Exports is a distributor of Canadian products to the International market. Canada Exports acts as a middleman to facilitate transactions between international buyers and domestic suppliers.
The customers of Canada Exports are primarily brokers that have relationships with retailers in their respective markets. The brokers are located in the United States, India, Netherlands, and Bulgaria among other countries.
A typical transaction would be a container of cell phones or laptops. Other sample orders include medical equipment, machinery, GPS systems, heavy equipment, vehicles, etc.
How Does Export Development Canada (EDC) Work?
EDC approval is a prerequisite to Canada Exports processing a transaction. Canada Exports has been financing transactions with EDC for over 25 years.
For illustration purposes, assume a purchase order of $500,000 for cell phones is received. Canada Exports submits an application to EDC to approve a potential buyer and the $500,000 transaction. EDC researches the company and agrees to provide a 90% guarantee of the receivable once the product is shipped. The transaction will be insured for $450,000. The insurance cost is approximately $2,500. The transaction is processed, the insurance fee is paid, the product is shipped and the supplier is paid. Once the buyer pays for the order, the buyer’s account with EDC is reset and they have an opportunity to purchase more products under the EDC program. It is the responsibility of Canada Exports to update the status of all files through an EDC portal.
In the event that the buyer defaults on their payment, the EDC insurance kicks in at 90 days and $450,000 is paid to Canada Exports. EDC then deals with the buyer and pursues them for payment.
To date, Canada Exports has never had to exercise the insurance due to a lack of payment.
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