About 400,000 UK businesses are missing the opportunity to export, despite increasing international demand for British goods and services.
This year marked 100 years of UK Export Finance. At a time when global economy suffers from endless non-tariff barriers (G20 countries alone have imposed 70% of all new non-tariff barriers since the end of the financial crisis), UKEF continues working to help British firms break into new markets and deepen existing trade links.
Last year the Department for International Trade launched its Export Strategy in a bid to turn Britain into a 21st century exporting powerhouse. Through the Export Strategy, the government encourages, informs, connects and finances UK businesses to take advantage of the increasing international demand for British goods and services.
77% of the businesses that UKEF supported in 2017/18 were small and medium-sized enterprises. But a fifth of all UK registered businesses tell us that they have never exported, despite believing that they have goods or services which would sell overseas. This translates to more than 400,000 UK businesses who could be exporting but are not.
A new Small Deal Initiative aims to enhance support for the smaller export contracts. Through this, companies of all sizes will be able to access buyer finance support, with UKEF guaranteeing the loans that their potential customers abroad take out in order to buy British.
The government will also simplify the processes involved in obtaining finance, allowing banks and other institutions to work more easily with UKEF to support smaller transactions. This will enable UK companies to get paid up front for their exports, while their buyers can benefit from deferred payment terms.
The new initiative is likely to attract new businesses that have thought of exporting overseas. Over the past decade UKEF has provided over £30 billion-worth of support helping over 600 UK exporters to grow their businesses in overseas markets.
The IMF estimates that 90% of global GDP growth in the next five to ten years will come outside of continental Europe. In connection with this, the UK government has set a goal to increase UK exports from 30% to 35% of Britain’s GDP, moving the country towards the top of the G7.
The government’s support has already brought positive results. In the year to March, British exports of goods increased by 4.2% while total UK exports have now reached a record £640 billion.
The article first appeared in B2B Global Professionals.