Impartial guidance from UK Export Finance

Posted on Friday 26th August, 2016 by

James Bowker, Export Finance Adviser for Kent, East Sussex and West Sussex explains how impartial guidance from UK Export Finance can help companies access the finance and insurance they need to export.

There is a world of opportunity for businesses in Kent and Sussex. Even a cursory search using the Exporting is GREAT site will illustrate the scale of the demand that is out there. Finding customers outside the UK is the key to growth for many firms as they seek to thrive in a global market place.
But when a company is ready to sell overseas, it may find it needs specialist trade finance and insurance. This can help give overseas buyers time to pay while protecting cash flow. Or it might mean higher levels of finance compared to conventional lending. And exporters might want to protect themselves from any risk of not being paid.

And that’s where UK Export Finance (UKEF) can help. UKEF is the UK’s export credit agency, working alongside the Department for International Trade to help make exports happen. Our mission is to ensure that no viable UK export fails for lack of finance or insurance from the private sector. To do this we provide tailored finance and insurance to help exporters win, fulfil and get paid for export contracts.
In 2015-16 in the South East of England alone, we provided support valued at some £11 million to help over £60 million in overseas sales for the region’s exporters in 2015-16. Over the last five years, we’ve supported more than £500 million worth of export contracts for SMEs. That’s real, tangible support for exporters in the South East that can help where they most need it.
Our objective, though, is to complement, not to compete with, the private sector, and in many cases the private market has a comprehensive range of support available for exporters in the form of trade finance and insurance. But we recognise that this world can be a complex one, especially for newer exporters.
That’s why UKEF’s Export Finance Advisers are based across the UK, including me here in Kent, East Sussex and West Sussex. We can work with local companies to identify where they might need specialist trade finance, offering impartial guidance about the support available, whether from HM Government, or from the private sector. The financial services landscape is changing fast, and with a wealth of alternative finance companies now available alongside traditional providers, information on what is available might be invaluable support.

Take Horsham’s Bluebox London. For over 25 years, it has specialised in installing high-specification sound systems, mainly in the club industry in the UK and abroad. High-profile international contracts include Mezzanine in San Francisco, Space and Privilege in Ibiza and BCM in Majorca. The company won a contract to instal a system in a hotel in Addis Ababa, Ethiopia, but the challenge was making sure it would get paid. I was able to work with Bluebox to find a bank that would accept a letter of credit from its Ethiopian buyer. This gave it the security to undertake the export contract.

Another area in which exporters might want to make sure they’re protected is mitigating exchange rate risk. If the contract with a buyer is in a currency other than GBP, exchange rate fluctuations might have an impact on the ultimate revenue from the sale. An exporter can choose to approach this in a number of ways: by opening a foreign currency “holding” account; by covering the risk with a forward contract with its bank; or by a combination of the two – either of which will be available from its bank. It might of course also decide that the risk is minimal and there is no need to take any action. But it’s important for any exporter to make sure that they have looked at their options and made an informed decision.
Exporting can help companies grow – and grow fast. Research shows that companies that start exporting on average grow by a third in just two years. Exporters can achieve levels of growth that may not be possible domestically, spread business risk, potentially achieve economies of scale not possible in their home market, increase revenues and profits and extend the commercial lifespan of their products and services.

And when the world needs a UK company’s expertise, it might find that it needs ours. At UKEF, we can help exporters find the support and assurance they need in a complex market, making exports happen in any way we can.

To find out more about how we can help your business, contact James Bowker on +44 (0)7812 667 327 or james.bowker@ukexportfinance.gov.uk.

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