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The International Trade Secretary has announced major steps to unlock finance for SMEs exporting to emerging markets, including a new small deals initiative.
A financial support package for small to medium sized business (SMEs) has been announced by International Trade Secretary Dr Liam Fox at a celebration of 100 years of UK Export Finance’s (UKEF) backing for international trade on Wednesday.
According to the government, this is the first time such an extensive financing package has been made available to small businesses exporting to fast-growing emerging markets from the UK.
The package will include:
Companies of all sizes will be able to access buyer finance support, with UKEF guaranteeing the loans that their potential customers abroad take out in order to buy British.
The department will also simplify the processes involved in obtaining financing, allowing banks and other institutions to work more easily with UKEF to support smaller transactions. This is expected to enable UK companies to get paid up front for their exports, while their buyers can benefit from deferred payment terms.
"If we want to become an exporting superpower, with greater influence, selling more goods and services abroad and encouraging more British investment overseas, then we will have to invest in the capabilities required," Dr Fox said.
"UKEF's work would be at the very forefront of this investment strategy."
British businesses play an import role in global supply chains. The latest available data shows that nearly a quarter (23.7 per cent) of UK exports in 2015 were embedded in the exports of other countries.
Confidence in the ability of SMEs willing to export also increased in 2018, as 5 per cent of SMEs not currently exporting said they plan to export in the future, up from 3 per cent in 2017.