Get financed

Growing your business to the extent that you are exporting to other markets can seem like a daunting task, but there are financial supports available for exporters. This section will help you think you about your financial plan for exporting and identify some financial supports that are available to your company to export its products and/or services.

Making a financial plan

Your export venture needs a comprehensive financial plan to ensure sufficient cash flow. This plan must include a cash budget and a capital budget. 

Cash Budget

The cash budget concerns short-term financing requirements (over the next 2-3 years). It will guide the timing and amount of your cash expenditures. Some short-term financial considerations for starting an export venture might include:

• Travel expenses for market research
• Resources required for finding and connecting with new clients such as intermediaries or extra staff time 
• Costs for localizing your product or service and marketing materials

In your cash budget, you should also consider potential financing available to offset these short-term costs. 

Capital Budget

The capital budget concerns longer-term financing requirements. It should contain an operating plan to measure actual revenues and expenditures to inform when your export venture generates positive cash flows.

Some ongoing long-term costs might include:

• Extra staffing requirements for managing the export business
• Increased production and marketing costs
• Costs for shipping and logistics, which may include hiring a freight forwarder
• Legal representation specializing in international law

Cash flow planning is important to mitigating certain financial risks associated with exporting such as:

• Issues with collecting payments or delayed payments
• Issues with shipping such as lost cargo or delayed shipments
• Fluctuations with the exchange rate or exchange controls limiting the purchase and/or sale of currencies
• Political events and changing economic circumstances in your target market
• Changes in trade policies between Canada and your target market

Professional help is recommended when developing a financial plan if you don't have a finance professional on staff. 

Resources

Step-by-Step Guide to Exporting – Step 8 – Identifying your export financing requirements
The Canadian Trade Commissioner Service
Learn about leveraging capital for your export venture and where to get financial help.

Overview of types of export financing

In order to get started exporting, you may need to apply for some kind of financing. Financing is available for exporting and more general business expansion activities from both private sources and government programs.

Private financing

There are two primary types of financing available from private sources: debt financing, which is a loan you will be required to pay back with interest on a short-term or long-term basis, and equity financing. Equity financing refers to obtaining investment in exchange for partial ownership or shares in your business’ profits and losses.

Types of equity financing include: 

• Personal investment
• Partner investment
• Shareholder investment: private vs public
• Employee investment
• Venture capital
• Crowdfunding

Government financing

Government support for exporting is generally provided at the provincial level, through the Government of Alberta, or at the federal level through the Government of Canada. You may also be able to find financial or other types of support through municipal governments and development agencies, industry associations, and government agencies such as the Business Development Bank of Canada, Export Development Canada, and Business Link.

Financial supports provided my government may be a grant, tax credit, wage subsidy or a loan government, and may cover various aspects of exporting activities performed by Alberta businesses, including:

• Doing international market assessments
• Developing export plans
• Developing export opportunities in high-growth emerging markets.
• Commercializing technology for use abroad
• Building an international presence
• Expanding into new international markets

In order to apply for most types of financing, you will generally be required to develop and submit an export plan.

Resources

Options and credit practices in export financing
Business Development Bank of Canada
A primer about business financing for exporting and what you will need to consider before developing your financing plan.

Financing your business
Business Link
A general guide to how to get business financing and the types of financing available to businesses.

Export support programs

The following is a short list of key government programs providing export support to small and medium enterprises. 

• SME Export Support Fund: Government of Alberta funding is available to help export-ready Alberta companies access new international markets. 
• Export Readiness Micro-Voucher program: Alberta small- and medium-sized enterprises (SMEs) interested in expansion into international markets can apply for up to $10,000 to offset the cost of developing an international market assessment or business plan, focused on one country.
• CanExport: CanExport provides direct financial assistance to small and medium-sized businesses (SMEs) registered in Canada to help them develop new export opportunities and markets, especially high-growth emerging markets.

 

Build your export plan

Answer these questions to start filling in your export plan template. As you answer each question, your responses will be sent to your export plan template, which you can download below.