Knelson has two general financing alternatives for export sales abroad.

1. Export Development Corporation (EDC)

• Financing generally available for up to 85% of contract value.
• 1 to 10 year terms with fixed or floating competitive interest rates.
• Payments are usually semi-annual starting 6 months after delivery.
• Goods must have Canadian content of at least 50% of the contract value.
• Financing may take one of the following forms:
  • Direct loan - to the buyer or borrower acting on behalf of the buyer, direct loans usually involve large transactions (contracts over $5m USD) with long repayment terms.
  • Line of credit - EDC lends to a foreign bank or institution who then onlends directly to the buyer (contracts between $50,000 and $5m USD).
  • Note Purchase - for single transactions less than $5m USD, terms between 1 - 5 years.
• In addition to loan interest, cost to the buyer will include:
  • Front end administration fee
  • Commitment fee
  • Exposure fee (in riskier markets)

2. NorthStar Trade Finance Inc.

• Complements Export Development Corporation's (EDC's) export financing services by providing quick and simple loans for export sales of between $100,000 and $3m USD.
• Provides fixed rate, medium term (1 to 5 year) loans.
• Secured by a registered lien over the exported goods and insured by EDC.
• Goods must have Canadian content of at least 50% of the contract value.
• Provides the buyer with a predictable repayment stream and does not disrupt buyer's banking arrangements.
• Tailored to meet the needs of the buyer.
• 7 business day turnaround. ·
• In addition to loan interest, cost to the buyer will include:
  • $300 USD application fee, refundable upon successful placement
  • Insurance premium payable to Northstar to cover EDC insurance
  • Front end administration fee of 1.25%
  • All reasonable out-of-pocket costs, including legal fees.

For further information, please check Northstar's website.