As the world’s first export credit agency, the UK Export Finance (UKEF) has been a cornerstone of support for British exporters since its establishment in 1919. Collaborating with the Department for International Trade, UKEF plays a pivotal role in facilitating international trade by bridging the gaps in financing and insurance where private sector risk capacity falls short.
UKEF’s mission encompasses a wide array of services, all geared towards boosting the prospects of UK exporters. They work hand-in-hand with exporters to help them secure lucrative contracts by offering attractive financing terms to their international buyers. This support extends to order fulfillment, as UKEF aids in bolstering working capital and trade finance. Moreover, UKEF stands as a reliable safeguard, insuring exporters against the perils of buyer defaults.
A key facet of UKEF’s offerings is its comprehensive range of trade finance products. These products provide exporters with the essential working capital needed to secure contracts and meet order requirements. Among these offerings are schemes like the Bond Support Scheme, the Export Working Capital Scheme, and the General Export Facility.
The Bond Support Scheme is instrumental for exporters who need to provide bonds such as performance guarantees or advance payment guarantees. UKEF can guarantee up to 80% of the bond’s value to the exporter’s bank, enabling the release of cash crucial for securing the bond. This released capital can then be utilized as working capital.
The Export Working Capital Scheme is tailored to assist UK exporters by providing a partial guarantee to their banks, ensuring that working capital facilities linked to specific export contracts are readily accessible. This, in turn, frees up cash flow for exporters to meet additional orders, making it particularly beneficial when dealing with larger or more numerous contracts.
For businesses aspiring to expand their export activities, UKEF offers the General Export Facility. This facility involves providing a partial guarantee to a UK exporter’s bank to facilitate access to trade finance facilities. It’s a valuable tool for increasing working capital, thereby supporting business growth, even without the necessity of a specific export contract.
One of the pivotal roles that UKEF plays is helping exporters manage the uncertainties associated with international trade. Their Export Insurance Policy insulates businesses from the risk of not receiving payment for export contracts or the inability to recover performance costs due to certain events. What sets UKEF apart is its ability to provide coverage even when the private insurance market falls short.
UKEF’s commitment to driving export growth is not confined to the UK alone. They assist exporters in winning contracts by offering competitive, long-term financing options to overseas buyers. This support can come in the form of guarantees on commercial loans or direct lending. These financing options are especially relevant for buyers in emerging markets and are instrumental in supporting larger, long-term projects that the private sector may not be equipped to handle.
In a global landscape marked by diverse currencies, UKEF ensures that its support remains accessible. With the capability to provide assistance in over 60 pre-approved local currencies, UKEF empowers more overseas buyers to engage with UK exporters and settle transactions in their preferred currency.
UKEF’s role in advancing UK exporters on the global stage is undeniable. Their diverse range of services and financial products stands as a crucial pillar in promoting international trade and sustaining the growth of British businesses on a global scale.