Small business owners will be able to access millions of pounds worth of government-backed export finance from their banks, after UK Export Finance (UKEF) signed a new partnership with five major lenders.
The five banks that have signed up include Barclays, HSBC, Lloyds, RBS/Natwest and Santander, and the aim of the partnership is to spread the benefits of overseas trade amongst more small firms and SMEs.
Under the new partnership, for finance up to £2m, business owners will be able to access UKEF funds directly from their bank quickly and efficiently, without the need to apply separately to UKEF.
Whereas previously it could have taken weeks to agree an eligible transaction with UKEF (on top of the banks’ own turnaround time), it will now only take a matter of seconds, providing a transaction has met UKEF’s criteria.
The new partnership will see banks simply notifying UKEF through a secure digital platform once a transaction has gone through.
In addition, companies that don’t yet sell overseas, but do supply directly to exporters, will qualify for UKEF support. For the first time, these firms will be able to access finance backed by UKEF from their banks, allowing them to become part of major export contracts.
Commenting on the new partnership, secretary of state for international trade, Liam Fox, said in a statement: “We’re partnering with the five major high street banks to make government-backed finance from UKEF readily available in a matter of seconds, opening up new global contracts to businesses across the UK.”
As the UK’s export credit agency, UKEF provides guarantees to banks, helping companies access finance even when they’ve reached their credit limit, or where deals are thought to be too risky for banks to take on.
Exporting is becoming more and more vital to the prosperity of the UK economy. Recent research from the Federation of Small Businesses (FSB) showed that with the right support, the number of small UK firms that export – currently 20 per cent of the total – could double.
Welcoming the new partnership with the banks, national chairman at the FSB, Mike Cherry, said: “Faster and more readily available finance means more small businesses will be able to access growth markets around the world.
“Small firms’ contribution to the UK’s export market is of course not limited to those that sell products overseas.
“Our research highlights that one in six of all UK small businesses also form part of a supply chain of which the end product is exported, so opening up export finance to this group of firms is great news.”
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