New guarantee scheme was launched in December to provide SMEs with export finance up to the value of £25 million and help them recover from COVID-19.
What is it?
On 7 December, UK Export Finance (UKEF) launched the General Export Facility (GEF), a new scheme designed to provide exporting SMEs access to working capital to support their COVID-19 recovery journey.
GEF was developed in association with the banking and finance industry to help small businesses access a wide range of trade finance products including trade loans, bonds and letter of credit lines with maximum repayment terms of up to 5 years.
Under the GEF, UK Export Finance can provide guarantees up to 80% of the credit risk on facilities typically worth up to £25 million (For facilities with values more than £25 million, one of UKEF’s other schemes may be suitable. You can contact your local Export Finance Manager for more information).
The scheme offers UK exporters access to bank facilities without the need of an export contract. This means businesses can focus on their overall growth without having to consider whether an export opportunity will be deemed supportable or not.
Is my business eligible?
In order to qualify for the scheme, you must meet both the bank’s and UKEF’s eligibility criteria. One of the key requirements is that you must self-declare that:
- in any one of the last three financial years, at least 20% of your annual turnover has been made up of UK export sales or
- in each of the last three financial years, at least 5% of your annual turnover has been made up of UK export sales
Additionally, you must:
- have premises and employees in the UK
- pay UK or Isle of Man/Channel Islands National Insurance Contributions or Corporation Tax
- manufacture goods, deliver services or produce intangibles from the UK, which would (if required) qualify for a UK Chambers of Commerce Certificate of Origin
- you do not solely engage in the supply of goods that have been manufactured outside of the UK or services where the person contracted to perform the services ordinarily carries on business outside the UK
How do I apply?
Exporters can directly access financial support through the scheme from the UK’s five largest banks: HSBC, Lloyds Bank, Natwest, Santander and Barclays, which can put in place UKEF’s guarantee automatically. To apply for the support, you should discuss your potential application with one of the participating banks.
Other lenders will be added to the facility in due course to ensure that it is available for as many businesses as possible.
For more information on eligibility and how the scheme works visit the government website.
If you are based in Greater Manchester or Lancashire, you can access fully-funded, tailored support through the Access to Finance team which has significant knowledge of the funding landscape and extensive relationships with:
- Business Angel networks
- Venture Capital
- Public Sector Funds
- Alternative emerging sources such as International Investors (via UK Home Office Innovator Visa’s)
The information provided is meant as a general guide only rather than advice or assurance. GC Business Growth Hub does not guarantee the accuracy or completeness of this information and professional guidance should be sought on all aspects of business planning and responses to the coronavirus. Use of this guide and toolkit are entirely at the risk of the user. Any hyperlinks from this document are to external resources not connected to the GC Business Growth Hub and The Growth Company is not responsible for the content within any hyperlinked