Banks have had a great deal of negative press about their reluctance to finance SMEs – and the hoops they make SMEs jump through to access funds. But thanks to a partnership with UK Export Finance (UKEF), five major high street banks have the chance to be an SME’s best friend.
A Boost from Your Bank
UKEF agreed a new partnership deal with high street giants Barclays, HSBC, Lloyds, RBS/NatWest and Santander that will allow smaller businesses to access millions of pounds in government-backed trade finance.
Now, companies will be able to access up to £2m of UKEF-backed finance to help them to become part of major export contracts – and they can do so through their bank.
And it’s not only open to SMEs who export directly – it’s also open to UK SMEs that aren’t exporting themselves, but are supplying products directly to companies who are.
Previously, it could take weeks to access UKEF finance and this waiting time had to be added to the banks’ own processing period. However, it’s claimed that where an application for this finance is eligible, the process should now take a matter of seconds. UKEF is notified through a digital platform.
Seizing Trade Opportunities
UKEF is part of the Department for International Trade and can provides guarantees to banks to help businesses access bank finance, even where they’ve reached their credit limit or where the deal is considered too risky for the banks to take on alone.
Secretary of State for International Trade, Liam Fox, said: “Small businesses are the backbone of our economy, and giving them the support they need to seize international trading opportunities is a priority for the Department for International Trade as an international economic department.
“That’s why we’re partnering with the five major high street banks to make government-backed finance from UK Export Finance readily available, in a matter of seconds, opening up new global contracts to businesses across the UK.”
Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), added: “Through our work with the secretary of state for international trade, I am delighted to see the government’s plans to improve access to export finance.
“The success of the UK economy rests on helping more small businesses to export, and export more. FSB research shows 20 per cent of UK small firms already export, and with the right support this could double.
He added: “Today’s announcement of faster and more readily available finance means more small businesses will be able to access growth markets around the world.
“Small firms’ contribution to the UK’s export market is of course not limited to those that sell products overseas.
“Our research highlights that one in six of all UK small businesses also form part of a supply chain of which the end product is exported, so opening up export finance to this group of firms is great news.”