A financial support package for small to medium-sized business (SMEs) is to be launched by government body UK Export Finance.
The government said it is the first time such an extensive financing package has been made available to small businesses exporting to fast-growing emerging markets from the UK.
The package will include:
- The Small Deal Initiative – to back the army of exporters undertaking the smaller contracts that underpin British trade
- Extending financial support to firms in exporters’ supply chains as well as exporters themselves
- The General Export Facility – covers general costs for exporters, rather than just costs related to a specific export deal
Secretary of state for international trade Liam Fox said: “These announcements are potential game-changers for our export industry, and will help us to tap a fresh vein of potential from within our economy.”
The Small Deals Initiative sees UKEF guaranteeing the loans of potential overseas buyers of British goods to make UK bids more competitive.
The General Export Facility also allows UKEF to support exporters’ overall working capital requirements, rather than requiring support to be linked to the needs of a specific export.
Fox said: “Recognising that it takes more than one business to deliver an export contract, UKEF has extended eligibility for its support to companies in exporters’ supply chains.
British businesses play an import role in global supply chains. The latest available data shows that nearly a quarter (23.7%) of UK exports in 2015 were embedded in the exports of other countries.
This more flexible approach will give smaller business greater access to bonds and working capital.
Fox also warned that the world must brace itself for a period of upheaval as the global economy looks set to slow down, but will argue that the work the Department for International Trade is doing through UKEF will help strengthen British exporters like never before.
Fox concluded: “Building a truly Global Britain takes real investment. It cannot be done on the cheap.
“If we want to become an exporting superpower, with greater influence, selling more goods and services abroad and encouraging more British investment overseas, then we will have to invest in the capabilities required.
“UKEF’s work would be at the very forefront of this investment strategy.”