Access to Support from United Kingdom Export Finance (UKEF)

Britain is racing against the clock when it comes to meeting the Government’s target of £1 trillion in exports by 2020. Exporters doing business in the UK require all the help and support they need in order to start exporting, or to expand their current export services.
We featured the advisory services provided by government body United Kingdom Trade and Investment (UKTI) in March’s issue of Outlook, and listed the practical help offered to exporters by UKTI in May’s issue of Outlook. This month, we look at the help and support available from a government body that specialises in export finance.

The Government’s Export Credits Guarantee Department – operating as United Kingdom Export Finance (UKEF) – aims to boost the UK economy through supporting export finance. It mainly provides guarantees, insurance and reinsurance against loss.

As we understand it, UKEF’s services include the following:

• Export insurance policy
  This is designed to protect an exporter from the risk of non-payment on an export contract. It can also be used to recover costs from executing a contract based on events which prevent the contract from being executed, or which cause its termination.
• Loan Guarantees to Banks
  UKEF does not only finance exporters in the UK, it also provides up to £3bn in loans to overseas buyers intending to purchase goods and/or services from UK exporters.These can take the form of the following:
  • Buyer Credit Facility
    This allows UKEF to provide a guarantee on a loan to an overseas buyer wishing to purchase capital goods and/or services worth at least £5 million from an exporter based in the UK.
  • Supplier Credit Financing Facility
    This allows UKEF to provide a guarantee to a bank on behalf of an overseas buyer wishing to purchase capital goods and/or services from an exporter based in the UK. It can also provide guarantees to banks in order to cover payments due on bills of exchange or promissory notes purchased by the bank from an exporter doing business in the UK. These need to have been received as payment for capital goods and/or services supplied to an overseas buyer.
  • Lines of credit
    UKEF can support UK exporters who trade in capital goods with quick access to finance made by UK banks in order to help overseas buyers purchase the exporters’ goods.
• Bond Support Scheme
  As UKEF is not a bank, it cannot always provide loans to UK exporters. However, it can provide partial guarantees to banks to help UK exporters obtain finance. UKEF can guarantee up to 80% of the bond value.
• Export working capital scheme
  Exporters with specific contracts may be able to enlist partial guarantees from UKEF to help them access working capital finance. Aimed at exporters who have won contracts larger than they are used to carrying out, this guarantee is usually up to 80% of credit risk.
• Export Finance Adviser
  Exporters can also request a free consultation with one of UKEF’s Export Finance Advisers in order to determine the best-fitting product for them.
• Other Advice
  UKEF also provides a wealth of export finance advice, ranging from cover policies for specific countries, to recommendations of private sector insurance brokers.
• Widening Avenues of Support
  The Chinese renmninbi is currently the second most-used currency in trade finance (the US dollar being the first). It is also in the top ten of most-used currencies in the world for payments. In June 2014, UKEF announced that it has added the offshore renminbi to the suite of currencies that it supports. This will allow it to support transactions conducted in renminbi by providing medium and long-term guarantees.
• Access to Export Finance
  Part of practical exporting is identifying the opportunities available for financing export contracts. Businesses seeking export finance should consider contacting UKEF.

For more information or to get started, visit the UKEF website at:
www.gov.uk/government/organisations/uk-export-finance

To discover how savings on currency costs can improve your bottom line when exporting, contact Smart Currency Business by calling 020 7898 0500, or by emailing [email protected]