NORTHSTAR Trade Finance Inc.

Eligibility Criteria

Summary

1.        Term Finance
NORTHSTAR provides fixed-rate, medium-term loans to your foreign buyer. This loan is secured by a registered lien over the exported goods and is insured by the EDC. The buyer then has a predictable repayment stream that will not affect his banking arrangements.

Transactions are tailored to meet the needs of clients worldwide; the goods and services being exported must have Canadian benefits (material, labour, etc.) of at least 50% of the contract value.

2.        Floor Plan Finance
Canadian exporters frequently sell their products abroad through distributors and often carry accounts receivable with these distributors for long periods of time.

The Floor Plan Finance option provides a direct loan to the foreign distributor. NORTHSTAR pays the exporter upon shipment of the goods to the distributor who, in turn, repays NORTHSTAR when the goods are sold, or in 360 days, whichever occurs first. Interest is payable monthly on the outstanding balance. The loan is secured by a promissory note and security interest in the inventory financed.

Benefits to Canadian exporters

• Small- and medium-sized exporters can offer buyers financing in support of their bids, comparable to the in-house financing packages offered to the buyer by larger competitors.
• Exporters can include NORTHSTAR's indication of interest as part of their marketing package, which is a valuable tool to their sales force.
• Buyer financing is available even for sales of relatively low dollar value.
• Funds are paid directly to the exporter, and NORTHSTAR assumes the buyer risk.
• Financing provided to the buyer is non-recourse to the Canadian exporter, provided the exporter has fulfilled its obligations under the contract with the buyer.
• Exporters generally receive payment in full from NORTHSTAR within 10 days of shipment.
• The exporter's line of credit is not affected by NORTHSTAR's financing.
• Loan documentation is standardized for greater efficiency and lower cost.
• NORTHSTAR's turnaround of exporters' applications for buyer financing is quick (within ten business days of submitting a completed application).

Costs to the Canadian exporters
Non-refundable application fee of $300 plus GST.

Costs to the Foreign Buyer

• Loan interest at current competitive market interest rates based on NORTHSTAR's cost of funds and fixed for the term of sale.
• An insurance premium is payable to NORTHSTAR to cover EDC insurance on each successful transaction. The rate is determined by EDC and varies by country and buyer credit risk.
• A front-end administration fee of 1.25% of the amount of the export sale on each successful transaction.
• All reasonable out-of-pocket costs for the loan, including legal fees.

The Funding Process
NORTHSTAR will process a complete application in seven business days. Once approved, NORTHSTAR issues a letter of offer, which may be presented by the exporter to its foreign buyer.

Upon evidence of receipt and acceptance of the product by the buyer, and a duly completed agreement signed by the buyer and exporter, NORTHSTAR will pay funds to the exporter directly and assume risk of the foreign buyer. NORTHSTAR will then collect the loan directly.

Yukon Contact(s):
See National Contact.