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UK Export Finance (UKEF) has made its first announcement of a successfully supported contract under its new bank partnership model.

The programme allows exporters to instantly access government-backed trade finance products directly from their bank, and was launched in October. It gives five high street banks authority to issue UKEF guarantees for their SME customers.

As previously reported by GTR, this partnership model aims to increase the speed with which UK exporters receive decisions on applications by enabling them to access two UKEF products from their bank: the Bond Support Scheme (BSS) and Export Working Capital Scheme (EWCS).

The specific deal, signed by a UK and a Nigerian company in November 2017, is the first under the scheme to be publicly announced; however, a UKEF spokesperson tells GTR it has backed other contracts under the model, details of which will be provided in its annual report and accounts later this year.

It involved UKEF and HSBC delivering trade finance to support North Sea Ventilation (NSV), a specialist manufacturer in the energy sector, to secure a £500,000 order to supply cooling equipment to Nigeria LNG.

Under the terms of the contract, the Nigerian buyer agreed to provide a 50% advance payment to fund the preliminary phases of the manufacturing process. In return, NSV had to provide an advance payment guarantee through its bank, HSBC. While HSBC was not able to issue a bond of the size required within NSV’s existing credit arrangements, it could support its customer with the new partnership model by offering a guarantee under UKEF’s Bond Support Scheme.

According to a UKEF statement, this process would in the past have involved NSV and HSBC submitting another application to UKEF, after which the export credit agency would undertake due diligence and approvals parallel to those HSBC had already carried out. This would have “added days or even weeks to the process”.

With the new bank partnership scheme, HSBC completed an online application on NSV’s behalf, and, because the transaction met UKEF’s criteria, the guarantee was issued automatically and instantly without the need for any further due diligence or approval by UKEF. As a result, NSV could provide the required bond to its customer and in turn access the £250,000 advance payment.

“Where previously it could take weeks in addition to the banks’ own turnaround times to access this support, it will now take a matter of seconds where the transaction is eligible,” UKEF says in a statement.

NSV’s finance manager John Parker adds that the new scheme not only makes the process simpler and quicker, it will also allow the firm to secure larger contracts than it would otherwise be confident it could fulfil.

The remaining four banks covered by the new model are RBS, Barclays, Santander and Lloyds Banking Group.

At GTR’s UK Trade & Export Finance Conference in June, where the details of the scheme were first announced, delegates said that the initiative was “very positive”, but “not enough”, suggesting that offering it only via these banks was limiting.

Speaking at the conference, UKEF CEO Louis Taylor said the agency will start with big banks but is “happy to work on that with challenger banks and alternative finance as well”.