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Greater fast-track funding for small UK exporters

Author: ICAEW Insights

Published: 03 Jan 2024

The government’s export credit agency is doubling its previous limit for trade finance to £10m to boost exporting.
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UK Export Finance (UKEF) is to introduce more flexible, quicker financing for small businesses in a bid to increase international trade through more exporting opportunities. 

The government’s export credit agency announced the new measures at its annual conference, revealing that UKEF can now fast-track applications for competitive trade finance worth up to £10m – double the previous limit.

It follows an announcement in the Autumn Statement that the government will offer additional support to help SMEs access global markets through UK Export Finance.

The new measures also raise the maximum time frames from two to five years for loans from the General Export Facility, which provides partial guarantees to banks to help UK exporters gain access to trade finance. The move aims to provide businesses with more flexible repayment terms during these challenging economic times.

By expanding its ‘auto-inclusion’ scheme, which provides fast-track access to trade finance products, small businesses can now secure more government-backed credit more quickly without manual intervention from UKEF. It means UK exporters can now seek credit with a simple request through a participating bank.

Small businesses have already unlocked more than £280m in financing through the fast-track scheme since it was unveiled in 2021, UKEF says.

Charles Platts, Chair of ICAEW’s Global Trade Community Advisory Group, says: “The speed at which finance can be accessed is critical to small businesses everywhere that are considering export opportunities. By expanding this facility, UKEF is giving small businesses throughout the UK a major source of quickly accessible finance that will enable them to chase opportunities that they may have otherwise not pursued.”

UKEF also announced its first ever ‘invest-to-export’ loan guarantee, securing a major overseas investment in North-East England. Helping South Korean manufacturer SeAH Steel Holding to build a wind technology factory in Teesside, this UKEF-backed financing will support more than 1,500 jobs in the UK supply chain as the factory creates major opportunities for suppliers small and large. 

This first use of the Export Development Guarantee product heralds the availability of more funding to support businesses investing in new UK export opportunities.

Tim Reid, CEO at UK Export Finance, says: “In speaking with our customers – and especially with small businesses – it’s clear that ease of accessing finance and flexibility in repayment terms make a big difference for firms wanting to export.

“We’re confident that our announcements will unlock even more deals for UK firms looking to sell to the world, whether they’re exporting for the first time or looking for the latest in a long line of export successes.”

UKEF has also signed a new agreement with HSBC India, which it hopes will pave the way towards a financing programme to support UK exporters hoping to enter the Indian market.

The ambition is to establish a financing programme under UKEF’s Standard Buyer Loan Guarantee programme, which it says will unlock up to £100m in potential loans allowing Indian buyers to purchase UK goods and services. Currently, around 7,500 SMEs from the UK export to India, one of the UK’s closest trading partners.

Stuart Tait, Head of Commercial Banking at HSBC UK, says: “We’re uniquely positioned to support the growth of trade and investment between India and the UK. We look forward to helping UK businesses tap into more opportunities, using our global network to bridge customers, cultures and economies.”

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