A new Government guarantee scheme will give exporting small and medium-sized enterprises (SMEs) the working capital they need to “recover from Covid-19”.
The new initiative, known as the General Export Facility (GEF), will help businesses by covering the costs of international trade, such as insurance and customs intermediaries.
According to UK Export Finance (UKEF), the Government will provide an 80 per cent guarantee on financial support from lenders to support “general exporting costs” up to the value of £25 million.
At launch, five of the UK’s largest banks, including HSBC, Lloyds Bank, Natwest, Santander and Barclays, will be approved to provide loans and finance facilities – such as bonds, letter of credit lines, CapEx and invoice financing – under the scheme, but other providers will be added in “due course”.
To qualify for GEF finance, your business must self-certify that in any one of its last three financial years, at least 20 per cent of its annual turnover has been made up of UK export sales, or in each of its last three financial years, at least five per cent of its annual turnover has come from UK export sales.
Commenting on the announcement, Minister for Exports, Graham Stuart, said the new initiative will help small businesses fulfil several export contracts while easing cash flow constraints.
“The new General Export Facility will make a huge difference for entrepreneurs who need the financial backing to go global and benefit from our free trade agreements. It will help us bring genuine optimism back to exporters,” he said.
“We were the only top ten exporting nation to grow exports last year. I’m determined for that success to continue as we recover from Covid-19. By transforming access to the world’s best export credit agency, we can unlock the entrepreneurial energy needed to make that a reality.”
Reanda UK is a subsidiary of leading independent accountancy firm Grunberg & Co Limited. Our aim is to help businesses and individuals to navigate the UK’s world-renowned business and tax infrastructure, and to support them with their international ambitions. To find out how we can help you, please contact us.