Overseas buyers often require Australian exporters to supply them with bonds as security for advance payments or in support of their performance obligations under a contract.

EFIC may assist by providing an advance payment or performance bond required under an export contract, particularly where the buyer is located in an emerging market and/or the exporter's bank or insurer has limited capacity to provide bonding facilities.

Features

• May be issued directly or in conjection with a commercial financier, including providing a guarantee to a bank issuing a bond.
• EFIC will consider conditional or unconditional (also known as demand bonds).
• EFIC's security requirements are dependent upon the bond type and assessment of the risks involved.

As buyers increasingly require security in the form of bonds, EFIC's bond facilities can mean exporters are able to compete more effectively in global markets.

Unconditional bonds may be called unfairly and without the buyer referring to the exporter.  EFIC offers Unfair Bond Calling Insurance to cover exporters against a substantial portion of the losses arising from an unfair bond call.

Exporting to the United States

The US market is unusual because it typically requires suppliers to post bonds for up to 100% of the contract value for performance obligations compared with 10-15% elsewhere, plus there is a lack of familiarity for US surety bond issuers with Australian exporters, and between Australian and US financial institutions. 

For these reasons, EFIC established a US$50 million bonding line in cooperation with Liberty Mutual Surety, an operating division of the Boston based Liberty Mutual Group, to assist small and medium sized Australian exporters in taking advantage of the opportunities afforded by the Australia–United States Free Trade Agreement ...read more

For more information about the AUSFTA visit www.fta.gov.au.

Eligibility and Application General Eligibility Application Form For all applications or queries about how to apply, contact us at finance@efic.gov.au or call us on 1800 887 588 between 8.30am - 5.30pm, Monday to Friday (Australian Eastern Standard Time), or if outside Australia on +61 2 9201 2111.