UK SMEs are set to benefit from a new working capital support facility to be launched as part of an expanded mandate for UK Export Finance (UKEF).
The general export facility (GEF) will allow the UK’s export credit agency to support the UK’s smallest exporters by assisting with their overall working capital requirements, as opposed to its traditional method of financing specific contracts.
A UKEF spokesperson tells GTR that the new facility will go live in the next few months.
UKEF highlights that the new facility will be most beneficial to exporters with shorter manufacturing cycles.
The launch of GEF was revealed by the UK’s chancellor Philip Hammond in the Spring Statement last week.
The statement also disclosed that UKEF would initiate a consultation on its foreign content policy, with a view to making the policy more flexible to ensure UKEF is recognising the full contribution of the UK supply chain.
According to UKEF, a more flexible policy will allow it to increase its support for different sectors.
Commenting on the statement, trade secretary Liam Fox, says: “Adapting in line with the world’s changing economy will be crucial to ensuring the UK meets its true trading potential.”
UKEF is active in a variety of sectors, including aerospace, construction, oil and gas, mining and metals, petrochemicals, telecommunications and transport.
Its focus on smaller exporters began in 2011 with the launch of new facilities specifically designed for SMEs. Since then it has provided support worth more than £646mn through these products, helping enable more than £4.1bn of UK exports.
UKEF was brought under the remit of the department of international trade (DIT) when the latter was formed in 2016, following the UK’s decision to exit the EU.
In October, the UK government committed to bolstering UKEF’s direct lending capacity by £2bn in the years after Brexit.