Note Purchases
Foreign customers may issue promissory notes to Canadian companies as a means for extending payment for goods and services. EDC purchases these promissory notes (with no requirement for security from the customers), thereby reducing the risk of non-payment while increasing the Canadian company’s access to cash.Business Benefits
- Competitive advantage: Canadian companies can win more business by offering attractive payment terms to foreign customers with reduced risk.
- Customer benefit: In some cases, foreign customers can show promissory notes as extended trade payables in their financial records, not as debt.
Coverage Details
Qualification Criteria
Cost
More information
Contact Us
To learn more about Note Purchases, complete our contact us form or call
1-866-283-2957 weekdays between 8 a.m. and 6 p.m. EST.
Coverage Details
EDC must be contacted before the contract is signed with the foreign customer to determine whether a note purchase is feasible and what arrangement is optimal. The Canadian company is actively involved in negotiation and implementation of the terms and conditions.
Qualification Criteria
Certain requirements must be met to qualify for a note purchase arrangement:
- simple payment terms on the export contract (such as payment on delivery)
- high credit quality of the foreign customer
- repayment terms generally of up to two years
- acceptable legal systems in the country where the promissory notes are being issued, providing EDC legal recourse in case of non-payment by the customer
To assess whether a financing proposal can be approved, EDC will require specific documentation.
Cost
Rates are negotiated by EDC with the Canadian companies, based on credit risk of their customer, term of the note and market risk.
More information
Call 1-866-283-2957, weekdays between 8 a.m. to 6 p.m. EST.
Complete our contact us form
