EFIC supports TTG with export working capital guarantee
Export Finance and Insurance Corporation (EFIC) has provided a £379,000 export working capital guarantee to assist TTG Transportation Technology Pty Ltd (TTG) to deliver its GBP 1.59 million ($2.5million) contract to provide train management software to UK’s First Rail Holdings.
New South Wales based TTG has developed train management software that focuses on fuel consumption efficiency and timetable achievement.
After winning a competitive tender for train optimisation in the UK, TTG will install 119 of its Energymiser systems in First Rail Holdings inter-urban trains. The contract includes hardware design and installation, project management, support and ongoing management.
To enable it to deliver on the contract, TTG needed to buy raw materials, and fund manufacture and installation costs. However, the company needed finance to fulfil their contractual obligations – so it was introduced to EFIC.
EFIC provided a £379,000 export working capital guarantee to TTG’s bank, Westpac, enabling the bank to then lend funds to TTG to meet the required costs associated with the delivery on their contract.
“EFIC’s support for this project, through the provision of this guarantee to our bank, has enabled us to satisfy our contract requirements while focussing our attention and finances on our core business – delivering on this contract as well as developing further business opportunities,” TTG managing director Dale Coleman said.
EFIC SME and Mid-Market director Robert Dravers said that while many SMEs are fully capable of delivering on major international contracts, the offshore buyer’s demand for guarantees can be a financial barrier to success.
“To obtain funds from a bank, an SME is usually required to provide full cash collateral to secure the loan. But doing so would mean diverting working capital from other opportunities, which puts an SME in the difficult position of having to choose between delivering on current contracts and continuing to grow its business.”