UK Export Finance (UKEF) has announced a new package of support for small to medium-sized businesses (SMEs).
Government research shows that businesses that export are more productive, create more jobs and pay higher wages. Smaller businesses are the lifeblood of the UK economy.
Yet there are still over 400,000 businesses across the UK that could be exporting but don’t – that is a fifth of all UK-registered firms.
As the UK’s export credit agency, UKEF’s mission is to ensure that no viable UK export fails for lack of finance or insurance, and it is determined to make it easier for SMEs to sell internationally, especially those taking their first steps into exporting.
The Small Deal Initiative
As part of this drive, Dr Liam Fox, Secretary of State for International Trade has announced UKEF’s new Small Deal Initiative. This will allow UKEF to guarantee the loans to potential overseas buyers of British goods to make trading with UK SMEs more competitive.
“We need to do more to open the way for businesses, large or small, to take their first step into selling overseas,” Dr Fox commented. “That is why I am pleased to unveil our new Small Deal Initiative, which will enhance support for smaller export contracts.
Through this, companies of all sizes will be able to access buyer finance support, with UKEF guaranteeing the loans that their potential customers abroad take out in order to buy British.”
This new initiative will be supported by a new dedicated underwriting team and includes new partnerships with banks (including challenger banks) and financial institutions, revamped products as well as simplified processes for underwriting these transactions.
This will improve access to buyer-finance support for UK companies with smaller transactions, where their buyers require medium-to-long repayment terms. By enabling the offer of attractive financing to overseas customers, this will back the army of exporters undertaking the smaller contracts that underpin UK trade
A gamechanging package of support
Other measures also announced by Dr Fox include:
- The General Export Facility, which will allow UKEF to support exporters’ overall working capital requirements, rather than requiring support to be linked to the needs of a specific export.
- Extending financial support to firms in exporters’ supply chains giving smaller business greater access to bonds and working capital.
He called these measures “potential gamechangers for our export industry, and will help us to tap a fresh vein of potential from within our economy.”
This is on top of other UKEF innovations of the past few years, including partnering with major high street banks to allowing SMEs to access UKEF-backed finance directly from their bank – potentially within seconds.
In UKEF’s Annual Report and Accounts, released last month, it revealed that 79% of the businesses that UKEF supported were SMEs and that, in total, it supported contracts worth £620 million through its trade finance products designed for smaller companies in 2018-19. This new package of support will allow them to do even more to help SMEs win contracts, fulfil orders and get paid.
If your business could benefit from this new support, then visit www.great.gov.uk/get-finance/ and see how UKEF can make your export happen