Liam Fox announces ‘gamechanger’ financial support package for UK SME exporters

Liam Fox announces ‘gamechanger’ financial support package for UK SME exporters

Secretary of State for International Trade Dr Liam Fox will announce major steps that will unlock finance for SMEs exporting to emerging markets.

These will include…

  • The Small Deal Initiative – to back the army of exporters undertaking the smaller contracts that underpin British trade
  • Extending financial support to firms in exporters’ supply chains as well as exporters themselves
  • The General Export Facility – covers general costs for exporters, rather than just costs related to a specific export deal

The package will be announced as Dr Fox speaks at a celebration of 100 years of UK Export Finance’s backing for international trade. This is the first time such an extensive financing package has been made available to small businesses exporting to fast-growing emerging markets from the UK.

He will say: “These announcements are potential gamechangers for our export industry, and will help us to tap a fresh vein of potential from within our economy.”

The Small Deals Initiative sees UKEF guaranteeing the loans of potential overseas buyers of British goods to make UK bids more competitive.

The General Export Facility also allows UKEF to support exporters’ overall working capital requirements, rather than requiring support to be linked to the needs of a specific export.

The secretary of state will say, “Recognising that it takes more than one business to deliver an export contract, UKEF has extended eligibility for its support to companies in exporters’ supply chains.”

British businesses play an import role in global supply chains. The latest available data shows that nearly a quarter (23.7%) of UK exports in 2015 were embedded in the exports of other countries.

This more flexible approach will give smaller business greater access to bonds and working capital.

Dr Fox will also warn that the world must brace itself for a period of upheaval as the global economy looks set to slow down, but will argue that the work the Department for International Trade is doing through UKEF will help strengthen British exporters like never before.

He will say: “Building a truly Global Britain takes real investment. It cannot be done on the cheap.

“If we want to become an exporting superpower, with greater influence, selling more goods and services abroad and encouraging more British investment overseas, then we will have to invest in the capabilities required.

“UKEF’s work would be at the very forefront of this investment strategy.”

On the role UKEF plays in helping exporters gain a foothold in new markets, Dr Fox will say, “UKEF is working to increase its scope and accessibility, both by expanding its risk appetite in key markets and ensuring that qualifying to access its finance facilities is made as straightforward for our firms as possible.”

“Indeed, since the referendum we have increased our risk appetite in more than 100 markets.”

“Given the returns that UKEF provides to the Treasury, it is not unreasonable to ask whether or not we should be looking at taking on increased risk appetite, while of course noting the importance of responsible and prudent use of taxpayers’ money.”

Venue: UKEF Trade & Export Finance Forum at 10.15am on 5 June

Occasion: UKEF’s Trade & Exports Finance Forum

Address: The Queen Elizabeth II Centre, Broad Sanctuary, Westminster, London SW1P 3EE