By Steve Pateman
Head of UK Corporate and Commercial Banking
“It has been reported elsewhere, but it’s worth repeating: the UK really does have a lot to thank its exporters for. The latest balance of payments figures may not give as full a picture of the importance of exports. In some ways they simply show how much we consume as a country. But there’s no doubt selling abroad is good for companies and for the economy as a whole. In the past we tended to think of traditional export industries as manufacturing, textiles and the like. These days the UK exports far more than that. For instance, our design, technology and creative industries are in high demand around the world. Indeed, one of our customers, manufacturing technology firm Vislink, has shown exactly what can be achieved by UK exporters. And while the economy at home is still experiencing a slow recovery, the buoyancy of export markets offers UK companies a significant opportunity to grow.
However, it’s not as simple as just selling to customers overseas. Exporting does carry risks and companies do need to make sure they are protected. In an effort to alleviate some of the risks involved in overseas trading – particularly for businesses just beginning their export efforts – a new scheme has been proposed. The ‘ExEFG’ (Export Enterprise Finance Guarantee) pilot scheme, announced by Business Secretary Vince Cable last month, centres around improving the access to credit insurance and bank finance for small and medium sized businesses. The scheme will cover a range of export-led finance options and will work by the Government offering guarantees to banks that lend to businesses looking to export. It is designed as an export-specific extension of the current Enterprise Finance Guarantee (EFG) scheme which aims to improve access to working capital finance for growing businesses. Businesses that access finance under the scheme will find that it extends the amount of risk capital available to them to facilitate international trade.
It will be priced as a commercial product, however, so it represents a good way for borrowers to access greater finance capacity rather than a cut-price solution. In our view, it offers a good way for fledgling exporters to get started on their entry into the export market. And as trading continues, businesses will often find that their need for bank finance will diminish as sales grow. Naturally, at Santander Corporate Banking we will play our part. We are fully committed to the scheme and through our extensive international network and our strong partnerships with banks across the world we will be doing everything we can to support the UK’s export pioneers.”
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