The government has announced an important new lending package that could make it easier for businesses to take on overseas work. Five major UK banks have agreed to make £11 billion available to help businesses invest, hire and expand into new international markets.
This is a sizeable collective move from these banks which, together, count half of all British businesses amongst their customers. The funding, therefore, has the potential to be practical for many businesses, rather than theoretical.
Understanding the new lending
The money is coming directly from the banks, but UK Export Finance (UKEF) will guarantee up to 80% of eligible loans. For working‑capital loans of up to £10 million, banks can apply this guarantee automatically.
Alongside the finance itself, businesses will be able to access support from bank relationship managers and UKEF’s regional Export Finance Managers.
What this could mean in practice
The package could be useful if you have a specific overseas opportunity, but the timing or scale is putting pressure on your cash flow. For example, you might receive an order from a distributor abroad and need to buy materials upfront. Or you might want to set up a team to bid on a contract overseas but need funding to cover the early setup costs or get some certainty around the business’s working capital.
International markets can sometimes prove an effective way to grow your business. The guarantee behind the lending could make financing such a move much easier to access and open up possibilities that may have felt out of reach.
What to do if this is relevant to you
If you already have overseas customers, or if you see international opportunities that you haven’t been able to develop, it could be worth speaking to your bank about how this lending sits alongside your existing facilities.
If you would like help assessing the viability of overseas opportunities or a more general health check on your business finances, please get in touch at any time. We would be happy to help you!
See: https://www.gov.uk/government/news/uk-lenders-step-up-with-11-billion-push-to-back-british-businesses