Jon Boyce, Scotland's UK Export Finance adviser, helps Scottish companies like yours finance international trade - ensuring you get paid via UK Export Finance bank guarantees.
UK Export Finance, UKEF (previously known as Export Credit Guarantee Dept, ECGD) is the UK’s export credit agency. It provides government assistance to exporters and UK investors (investing overseas) in form of bank guarantees and insurance products
If you're planning to export goods or/and services from UK then it is likely you'll need some form of credit guarantee or insurance to protect you against nonpayment or other financial issues.
If the private sector such as banks or/and insurance companies refuse to give you what you need then, UK Export Finance may be able to help.
What we do
We provide bank guarantees, insurance and advice to UK based exporters, large companies and SME’s, where there is evidence of market failure on behalf of banks and/or insurance companies.
UKEF has its own risk assessment framework and our work is focused on helping UK exporters maximise opportunities to expand international sales.
How our role has changed
Previously, the ECGD only dealt with insurance policies and bank guarantees for exporters of capital goods and capital services only. Under their rebranded name, ‘UK Export Finance’ has an expanded remit to cover all sectors and all exports; not just capital good and capital services.
Exported goods must have a minimum UK content of 20% which can include design work or consultancy services.
Insurance against risk
UKEF provides a range of support services including:
Export Insurance Policy (EXIP)
This is an insurance against risk of not being paid or not being able to recover costs of performing an export contract due to specified events.
All sectors can be covered up to 95% of the contract value. This product does not cover exports within EU (except Greece) or certain OECD rich countries, such as USA, Canada, Australia etc under a two year risk horizon.
Contract Bond Scheme
We provide guarantees to a participating bank who issues a performance bond against an export contract. It is the importer who demands a performance bond as part of the contract.
We can also provide up to 80% guarantee to the bank where there is insufficient security within business or in a scenario where the bank asks for bonds to be 100% cash backed, thereby creating working capital issues for business.
UKEF's bond guarantee to the bank can release cash back to the exporter from the bond to be used as working capital against that particular contract.
Export Working Capital Scheme
We provide guarantee to banks to cover the credit risks associated with working capital facilities in respect of a specific export order/s.
We can take up to 80% of risk through this bank guarantee.
The max term of loan is two years and the working capital facility to export contract value is a maximum of 75%.
Letter of Credit Guarantees
We can provide between 50-90% guarantee to a UK bank on a confirmed letter of credit. The confirmed letter of credit gives the exporter a double guarantee – one from the importer's issuing bank and a confirmed letter of credit from a UK confirming bank.
With a UKEF guarantee in place the UK bank is able to confirm a letter of credit even if it does not have the risk appetite on the foreign issuing bank.
An important point here is that the exported goods must touch UK shores.
This product does not cover exporting within EU or certain OECD countries such as USA, Canada, Australia etc.
Buyer Credit and Supplier Credit Facility
Last but not least, we can provide guarantees to a bank that makes a loan to an overseas buyer for capital goods and/or capital services.
Under a 'buyer credit facility' the value of the export contract is minimum of £5m, and under a 'supplier credit facility' the value of the export contract is minimum of £25k.
We can provide a bank guarantee up to 85% of the contract value. We can also look at providing guarantees under Bills of Exchange or Promissory notes.
For full details go to the UK Export Finance website