Ever since its inception, UK Export Finance has been innovating and helping UK businesses win, fulfill and get paid for export contracts.

The last few years have seen a rise of barriers to trade across the world. Since the end of the Financial Crisis, G20 countries have imposed 70% of all new non-tariff barriers to trade globally. The result of these – and the imposition of unilateral and retaliatory tariffs – has seen trade growth slow dramatically from 5.4% in 2017 to a projected 3.4% this year.

Forecasts for some of the major economies, such as Germany and the Eurozone more widely, have been downgraded, significantly and this may well have an impact on the 44% of our exports which currently go to the EU.

The fundamentals of UK economy look much stronger today. Unemployment is at a 45-year low, wages are growing faster than inflation and both exports and inward foreign direct investment are at record levels. But the economic headwinds are against the UK as much as other developed economies, and UK businesses have to brace themselves for a period of increased difficulty, not least because of Brexit and a trade war between the US and China.

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 is encouraging, informing, connecting and financing UK businesses to take advantage of the increasing international demand for British goods and services.

More than 400,000 UK businesses could be exporting but are not.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.

One of UKEF’s main achievements was faster and easier provision of government-backed export finance for small and medium-sized companies. As a result, 77% of the businesses supported by the Department for International Trade in 2017/18 were small and medium-sized enterprises.

“There’s never really been a better time to become an exporter or to invest in UK exports.” – Dr Liam FoxThe government’s aim is to increase UK exports from 30% to 35% of Britain’s GDP moving us towards the top of the G7. As pointed out by the Secretary of State for International Trade, Dr Liam Fox, at the 2019 UK Trade and Export Finance Forum, “There’s never really been a better time to become an exporter or to invest in UK exports”.

The IMF estimates that 90% of global GDP growth in the next five to ten years will come  outside of continental Europe. “UKEF’s expertise and resources are an invaluable asset as we prepare to leave the European Union and become a truly outward looking, global, trading nation,” Dr Liam Fox said. “There are now unprecedented opportunities for growth in emerging markets which our firms are well-placed to take. And we want all British firms large and small, that are able to export, to be part of this success in the future.”

Importantly, UKEF has recently extended eligibility for its support to companies in exporters’ supply chains.  This will enable firms, from car parts suppliers to food packagers – who play a crucial role in supply chains but do not directly sell goods or services overseas themselves – to access the support they need to thrive.

A new Small Deal Initiative aims to provide further finance support to companies of all sizes, with UKEF guaranteeing the loans that their potential customers abroad take out in order to buy British.  This will enable UK companies to get paid up front for their exports, while their buyers can benefit from deferred payment terms. The government promises to simplify the processes involved in obtaining finance, allowing banks and other institutions to work more easily with UKEF to support smaller transactions.

Another initiative, a new General Export Facility, will allow UKEF to support exporters’ overall working capital requirements, rather than supporting where it’s linked to the needs of a specific export contract.  This more flexible approach will be of particular help for smaller businesses and companies with shorter manufacturing cycles.

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. In the year to March, British exports of goods increased by 4.2% while total UK exports have now reached a record £640 billion.

Image: Tom Fisk

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