A bill has recently been introduced to the federal parliament that aims to make it easier for small and medium-sized businesses to export products overseas.
The changes will affect the Australian Export Finance and Insurance Corporation (EFIC), the government's export credit agency, which oversees the allocation of government financing to support exporters.
Under current rules, EFIC is only allowed to lend to organisations exporting capital goods to foreign countries. However, this category only applies to about 5 per cent of the country's exports. By changing the rules under which EFIC operates, the government hopes to expand the range of products that can receive additional funding.
The Minister for Small Business Bruce Billson highlighted the breadth of industries that would benefit from this change in a recent press release.
"[Currently] EFIC cannot support the export of many of the Australian products we excel in, including many from regional Australia, such as consumer goods like pharmaceuticals, beef, sheep meat, livestock, horticultural products, wine, flour, fibres and cheese," the media release stated.
"This will immediately and significantly improve the export potential of Australian small and medium-sized businesses and will be an important mechanism to advance rural and regional economies."
These changes will also reduce the regulatory burden placed on companies, with fewer hurdles for organisations to jump over as they look to operate in this space.
While this proposed highlights the range of support that is available for Australian small businesses, export credit isn't the only way companies can support their operations. Many companies will already take out trade finance in order to support orders from suppliers, with this freeing up greater capital for small businesses to invest elsewhere.
As the range of support increases for both importers and exporters, it is likely that an ever?-increasing number of companies will start looking for alternative financing models to support their expansion.
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