Flagship £5 billion scheme will boost UK exports
A new £5 billion scheme supporting exporters who want to develop high value opportunities could transform the prospects of thousands of UK businesses, according to a Shropshire international trade expert.
Nicole Howarth says the Export Refinancing Facility (ERF), launched by the Government, gave tangible support to businesses which lacked the capital to break into new markets abroad or bid for major long-term projects overseas.
The ERF is aimed at equipping UK exporters with competitive long-term financing to buyers of their products abroad. Loans in excess of £50 million are available to firms accessing high value opportunities in new markets, so they can purchase capital goods and services.
Mrs Howarth, managing director of award-winning Telford shipping company Global Freight, said: “The ERF is a tool which will allow the Government to lend to overseas projects on the proviso that they use British goods and services, thereby supporting exports. This scheme marks a real change in support levels for companies which have the products and the confidence to target emerging markets, but lack the right level of financing to make real inroads overseas.
“Targeting a new market is hard work and expensive – many companies have all the ingredients to successfully trade overseas. However, high value opportunities in emerging markets takes capital and time, and time is money. Knowing that loans such as these are available means more companies will be confident of taking that step.
“Exporting to new markets can also be risky, and this scheme negates some of the financial risk for businesses which may now launch international trade programmes knowing the loan facility will support them.”
The scheme allows overseas buyers to access the highly competitive funding of the debt capital markets to refinance export finance loans after their initial funding by the banks.
Announcing the launch of the scheme this month, Trade Minister Lord Livingston said: “Increasing UK exports and giving UK exporters the support they need is key to our long-term economic plan to promote sustainable growth. The Export Refinancing Facility will help British firms succeed overseas by lowering the cost of finance for buyers who choose UK companies for their major projects.”
Under the new facility, UK Export Finance will guarantee the repayment of bonds issued by the buyer to refinance the initial loan. This will allow the bonds to be competitively priced at a fixed rate, which takes account of the UK’s credit rating. Should the borrower be unable to refinance the loan, UK Export Finance will become the lender until alternative funding is found.
Notes to Editors
– Global Freight, of Halesfield, Telford, is an international freight forwarder which won the 2010 Shropshire Small Business of the Year award. Managing director Nicole Howarth set up the company in 1996, and is an established expert in the movement of goods worldwide. The business has grown its turnover consistently, year-on-year.
– The company prides itself on making global shipping as straightforward and predictable as possible for its clients. Alongside its movement of regular cargo, Global Freight has created a reputation for the smooth and safe shipment of delicate (and sometimes extremely heavy!) artwork. The company also works with businesses looking to move freight globally for the first time, to de-mystify the process for them.