UK exports are valued overseas, yet too many smaller firms still struggle to turn opportunity into sustained trading relationships. Barclays recommends clearer, easier-to-use support from UK Export Finance, with guarantees that support lenders’ risk appetite and the working capital pressures facing SMEs.
UK goods and services travel well. Yet, smaller companies face a harder journey when selling overseas. The difficulty can sometimes begin after an opportunity appears: finding the finance to complete the sale.
In its report published earlier this year, ‘Driving UK exports through boosting the utilisation of UK Export Finance’, Barclays traced that loss of momentum. Total UK trade across imports and exports grew by 7% in real terms between 2019 and 2025, compared with an average of 20% in each of the previous three six-year periods. Goods exports fell by 12%, while the number of SME goods exporters declined by 10% (12,000 companies) between 2020 and 2024.1
Regulation, currency risk, logistics and geopolitical uncertainty make overseas growth more difficult. Finance is one barrier that banks and government can address directly, helping viable exporters fund the distance between securing an order and delivering it.
Support within reach
UK Export Finance (UKEF), the nation’s export credit agency, has a £130bn commitment limit, giving it substantial capacity to help drive UK exports.
Barclays’ report sought to offer some ideas on how the deployment and utilisation of UKEF facilities could be improved. It found that awareness of UKEF often struggled to translate into use. Among exporters surveyed, 79% were aware of its services, yet only 27% had used them. Another 37% had considered UKEF but did not proceed.
Experiences were far more positive once businesses secured support, with 92% of users satisfied. “What we’re facing is an educational and a utilisation challenge,” says Jaya Vohra, global head of trade and working capital at Barclays. “There are tools out there, but there’s a challenge around spurring utilisation and scaling that through the supply chains.”
Eligibility can be difficult to interpret, processes complex and product fit uncertain. For a smaller company without specialist finance staff, the support can appear designed for someone else. For those businesses, the practical hurdle is seeing a clear route from initial interest to an application worth pursuing.
Barclays has supported more than 400 UKEF-backed transactions in eight years, including SME deals. Those transactions give the bank a close view of the residual risk, servicing costs and delays that can still block viable deals, even where public support is available.
Effective export finance begins with the company’s commercial cycle: how long cash will be tied up, where the goods are going, what terms the buyer expects and how much strain the balance sheet can absorb. “It’s about determining which products actually work for clients,” says Vohra.
Public backing becomes valuable when the commercial case is sound but the funding request sits beyond a lender’s appetite. The bank retains responsibility for the credit decision, with UKEF absorbing a defined share of the risk. “Working with partners like UKEF can enhance our balance sheet appetite and extend and scale it,” Vohra says.
From deal to portfolio
A new scheme will test that recommendation in practice. In July, UKEF and the British Business Bank (BBB) announced a programme to carry risk-sharing further down the market. It aims to reach thousands of smaller businesses whose borrowing needs are too small to carry the fixed cost of conventional lending.
“A joint scheme with the BBB to be launched in spring 2027 will further enable UKEF to reach SMEs to help them start and grow their export journeys,” says Amy Clarke, head of short-term business at UKEF.
The agency will cover a share of losses across an eligible portfolio while lenders retain part of the risk. The BBB will assess, onboard and oversee participating lenders. By spreading risk across a portfolio, the scheme could make lower-value loans more commercially viable.
Jaya Vohra, Barclays
“There are tools out there, but there’s a challenge around spurring utilisation and scaling that through the supply chains.”
The structure closely mirrors a central Barclays recommendation: a portfolio approach for companies with turnover of roughly £5mn to £10mn, alongside guarantees above the usual 80% threshold where residual exposure still prevents lenders from supporting the smallest exporters.
A wider pool could bring newer exporters, smaller facilities and businesses with limited collateral within reach. The scheme’s usefulness will hinge on the share of risk lenders retain and the types of loans that qualify.
UKEF provided more than £11bn in loans, guarantees and insurance during 2025-26, supporting 616 SMEs and sustaining 85,000 jobs, according to its annual report. Research by Oxford Economics found that UKEF customers’ supply chains have grown to include 115,000 UK businesses.
Reaching thousands more SMEs will require a process built to handle more, lower-value cases without allowing cost and delay to creep back in.
UKEF already guarantees finance through accredited lenders under its General Export Facility. “The General Export Facility is now one of our flagship products, where we partner with lenders and guarantee them to lend to SMEs so they can export more,” says Clarke.
Lenders will need a clear dividing line between the facilities so each application enters the right channel.
Making small tickets work
The new UKEF scheme is a step in the right direction, and through its role as co-chair of the B20 Trade Taskforce this year, Barclays is encouraging similar public-private partnership approaches to support global trade.
Public guarantees can widen a bank’s appetite for smaller-business lending. Even a modest facility brings substantial work, from onboarding and know-your-customer checks to financial crime controls, trade-based money laundering assessments and monitoring. Much of that burden changes little with loan size.
“Even if the credit support comes through from export finance providers, if we don’t solve the cost-to-serve issue, we can’t scale,” says Vohra.
Exporters feel the same friction from the other side of the desk. Repeated information requests, uncertain eligibility and slow approvals consume time that smaller management teams can ill afford. An overseas opportunity may take months to cultivate, only for finance to become urgent once the order lands.
The Barclays report highlighted that delegated authority and automated underwriting had accelerated approvals for smaller General Export Facility transactions, while larger and more complex cases still required manual assessment. Verified information should accompany the application as it moves between the exporter, lender and public guarantor, reducing the need for repeated requests at each stage.
Wider delegated limits could allow lenders to decide straightforward applications without sending each one back through the chain, shortening response times while preserving responsibility for the credit decision.
Turning support into trade
For smaller companies, export finance can still feel remote from the sale itself. Specialist language can obscure the questions that matter: how to fund the transaction, protect cash while payment remains outstanding and keep the order moving.
Making export finance easier to understand falls to the industry. “We speak a language that our clients and corporates probably don’t understand, so it’s on us to actually demystify trade finance,” says Vohra. Framing the discussion around financing and risk mitigation gives exporters a clearer place to begin.
Export credit insurance brings that principle down to a single sale. UKEF can step in where private insurers may not, whether because the destination is difficult, the exposure small, or the premium too low to justify the work.
“We will sit where those private credit insurers won’t go, whether because of the overseas jurisdiction or because the transaction is too small,” says Clarke.
In a lender’s eyes, that cover can strengthen the receivable, helping the exporter raise working capital against its insured value.
The portfolio guarantee could extend that reach to smaller working capital requests, provided eligibility criteria are clear, risk-sharing arrangements are workable and the application process remains simple.
“British goods command a premium overseas, and there is a market for them. We just need to enable access,” says Vohra.
Success for smaller businesses means shortening the distance between recognising an overseas opportunity and securing the finance to deliver it.
Reference
1. The decline was 19% when 2023 is compared with 2020. However, there was a rebound in the number of SME exporters from 2023 to 2024
