| A new micro-loan program announced in Regina last week will help Saskatchewan exporters finance one-time or smaller sales that may not interest conventional lenders.
The Saskatchewan and federal governments and the Saskatchewan Trade and Export Partnership, or STEP, will assist exporters to get financing before and after a shipment.
STEP will operate the Nextrade program. The province will contribute $1.2 million over three years to the loan fund and Ottawa will provide $525,000 for operating costs.
Provincial industry and resources minister Eric Cline said small- and medium-sized businesses in particular need this program.
“Smaller exporters are sometimes forced to access personal credit,” he said. Sometimes, they have to walk away from a sale.
| Through the pre-shipment financing program, Nextrade will offer companies with confirmed export orders access to $20,000-$150,000 to help fill those orders. The capital is available for 60 days.
The accounts receivable program allows sales valued at between $20,000 and $150,000 to be turned into cash immediately.
Nextrade will advance the money to the exporter and be paid by the buyer under 90 day terms.
“The money will act as a revolving fund,” Cline said, noting that interest will be charged at commercial rates.
It will help businesses get to the point where they don’t need the program, he said.
Glen Millard, Nextrade managing director, said the program should become self-sustaining over time.
| Duncan Werner, who attended the news conference, could already see the benefits.
“We can spend our working capital building our business, instead of mortgaging our receivables,” said the operations manager of CanMar Grain Products Ltd., a Regina-based flax processor.
“We’re just starting out and you’re always spending money on unforeseen things. This will help our cash flow… and ease stress.”
Keith Brown, chair of the STEP board of directors and president of Trailtech Inc. in Gravelbourg, Sask., said the lack of available capital has been a concern for many exporters.
Cline added that the program could particularly help rural companies that are developing niche markets.