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UK launches export finance scheme to include exporters’ logistics providers

Partnership with banks will deliver government-backed financial support more quickly and efficiently, and for the first time to firms’ forwarding suppliers.

The UK government has launched a new scheme to streamline export finance for UK small and medium-sized (SME) exporters that for the first time will include exporters’ freight forwarding and logistics providers in a bid to boost UK exports after Brexit.

The Department for International Trade said that under the scheme, UK Export Finance (UKEF), the UK’s export credit agency, would help many more businesses, “both exporters and supply chain SMEs”, access financial support through their banks.

Secretary of State for the Department for International Trade Liam Fox said UKEF would partner with five of the UK’s biggest banks “to deliver government-backed financial support to exporters more quickly and efficiently”.

Partnering with Barclays, HSBC, Lloyds Banking Group, RBS/NatWest and Santander, UKEF would “also be able to extend its support to supply chain companies of UK exporters, significantly increasing the number of businesses able to access UKEF-backed trade finance”.

As a result, smaller companies that support big UK exporters will be able to secure government-backed financing to deliver products and services and benefit from their clients’ international business, the department added

Fox commented: “Providing easily accessible finance, backed by UKEF’s guarantee, will lift a common barrier to exporting. Providing that finance to suppliers as well as exporters means spreading the benefits of global trade, supporting more jobs and growth for companies large and small.”

Jeff Longhurst, head of commercial at banking trade association UK Finance, commented: “The industry is committed to making it easier for UK exporters to access finance, and UK Finance has worked closely with lenders and UKEF to make this process simpler. With nearly 70% of international SMEs planning to grow in the next 12 months, today’s announcement is a boost for both SMEs and the wider economy, helping support businesses across the country.

“Through this new model, banks will be able to provide export-related trade finance, for example working capital loans and bonds required by overseas buyers, to support their SME customers directly, and with UKEF’s guarantee in place should it be needed. At the same time, UKEF will make trade finance support directly available to direct suppliers supporting UK exporters, in a major enhancement to its existing offer. This will allow thousands of companies in manufacturers’ and service providers’ supply chains to access contract bonds and working capital loans with the government’s guarantee.”

He said all of this was being delivered to banks through a new and secure digital platform, to help ensure the quickest response times and most efficient customer experience.

John Mahon, head of Barclays Corporate Banking, said: “Delegated authority will make accessing UKEF guarantees simpler for many businesses and will help companies we work with grow more quickly. Both exporters and companies involved in international trade through supply chains will benefit, and we look forward to further collaborating with UKEF and our colleagues across the industry to find more new and innovative ways to help UK businesses take full advantage of export opportunities.”

Since UKEF’s trade finance products were launched in 2011, nearly 300 companies have benefited from nearly £500 million in support for several billion pounds worth of overseas contracts. This development follows a partnership agreement between the Department for International Trade and the five banks signed in July 2016.

UKEF is the UK’s export credit agency and a government department, working alongside the Department for International Trade as an integral part of its strategy and operations. It exists to ensure that “no viable UK export should fail for want of finance or insurance from the private market”. It provides finance and insurance to help exporters win, fulfill and ensure they get paid for export contracts.

Sectors in which UKEF has supported exports include: manufacturing, construction, oil and gas, mining and metals, petrochemicals, telecommunications, and transport.

Source: Lloyds Loading List

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