Funding your global expansion

Many businesses, at some stage in their life, need funds from external sources.  That is, their cash flow is insufficient to allow them to grow at the desired rate or to take a quantum leap into an entirely new level of operations or to expand globally.  For any business, poor or negative cash-flow creates strain and is not sustainable, and for some a failure to obtain additional funding may mean the end of their business.  This may be particularly acute when a business has a relatively mature position in Australia but is seeking to expand overseas.

If your global expansion is occurring by way of appointing a distributor for your products then it may be possible to obtain healthy deposits from them when they place an order, which can in turn pay or contribute to paying the required deposit likely required by the business’ suppliers/manufacturers.  There may still be a cash flow gap.  Clearly, this is not available if the business is seeking to grow organically and set up its own operations overseas.


The principal sources of funding available to businesses are bank loan, factoring, an angel investor, private equity/venture capital, crowd funding (either in exchange for product or for shares in the entity) and/or going public (that is, a full blown initial public offering of the entity’s shares on the Australian or other stock exchange).


Besides the traditional avenues listed above, support may be available from the Australian government via Export Finance Australia.  For example, EFA may be able to provide either a direct government loan or a government guarantee of your existing or proposed finance facility (which guarantee may increase the amount your financier may be willing to lend to you).  It is not a requirement that your products are manufactured in Australia or are imported into Australia before being exported overseas for the government support to be available.


This is not a free kick.  Commercial terms apply.  For example, the loans are unsecured, but do require a director’s guarantee, and interest is payable (current indicative rate is 12% p.a.).


EFA has eligibility criteria, but it is a potential avenue definitely worth investigating (