FOREIGN EXCHANGE FACILITY GUARANTEE

Overcoming financial barriers for exporters
FOREIGN EXCHANGE FACILITY GUARANTEE
WHAT ARE THE BENEFITS?
FOREIGN EXCHANGE
FACILITY GUARANTEE
For exporters, adverse movements in exchange rates are an inherent
risk of doing business in international markets. For example, if you
pay your suppliers in Australian dollars but receive payment for your
exports in US dollars, unfavourable shifts in the exchange rate of the
currencies may affect your profit margin.
A foreign exchange facility can help you protect your export profits
from exchange rate fluctuations by locking in exchange rates and
allowing you to hedge your currency exposure. The more of your
export contracts you can hedge, the greater your control over foreign
exchange risk.
With a foreign exchange facility guarantee from EFIC, Travelex can
increase the trading limit on your foreign exchange facility. This means
you can extend your hedging program to more of your export contracts
and better protect your export profits.
Generally, you don’t need to provide security for a foreign exchange
facility guarantee from EFIC. This can help to free up your working
capital to take on further export contracts.
• Hedge more of your export contracts which can help to better
protect your export profits
• In most cases, EFIC does not require security for the guarantee,
which can help to free up your working capital
• No additional fee is payable by you for the guarantee.
Only available to Travelex customers who have or have approval for
a foreign exchange facility. To find out how to increase the trading
limit on your Travelex foreign exchange facility, contact Travelex
on 1800 730 400 or enquiry@travelex.com.au

HOW DOES THE FOREIGN EXCHANGE FACILITY GUARANTEE WORK?
Australian exporter
1. Current or
approved foreign
exchange facility
2. Application
for increased
trading limit
4. Increased
trading limit
3. Foreign exchange
facility guarantee
1. You have or have approval for a Travelex foreign exchange facility
2. You request from Travelex an EFIC foreign exchange facility guarantee
to increase the trading limit on your facility
TERmS AND CONDITIONS
Eligibility
You should be an Australian exporter and:
• have or have approval for a Travelex foreign exchange
facility which relates to foreign exchange forward
contracts (and, for eligible customers, option contracts)
for hedging purposes only
• in the last 12 months, have exported goods or services
to at least the value of the foreign exchange facility
guarantee.
Amount
For Travelex customers who have provided certain financial
information to Travelex, the guarantee can facilitate an
additional trading limit of up to $2.5 million
For other Travelex customers, the guarantee can facilitate
an additional trading limit of up to $500,000.
3. If EFIC approves the application, it provides a foreign exchange
facility guarantee to Travelex
4. Travelex increases your trading limit, enabling you to hedge more
of your export contracts.
Terms and conditions are subject to negotiation. The following guidelines are typical requirements.
Term
The term of the foreign exchange facility guarantee
may be up to 12 months.
Fees & charges
You pay no additional fees or charges to obtain a foreign
exchange facility guarantee.
Security
Generally, EFIC does not require additional security
from you for the foreign exchange facility guarantee
that it provides to Travelex.
NOTE: Information in this brochure, including on terms and conditions is supplied as a general guideline only. EFIC’s compliance with legislation
and OECD guidelines, together with its credit assessment and other policies, influence the actual terms and conditions that may be applicable
to any eventual transaction with EFIC.
The information in this brochure does not comprise advice or a recommendation and EFIC makes no representation or warranty relating to it.
To the maximum extent permitted by law, EFIC will not be liable for any direct or indirect loss or damage incurred by any person on the basis
of information in this brochure.
For more information about EFIC’s other finance and
insurance solutions, contact us on 1800 093 724
or visit www.efic.gov.au
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