UK funding to boost overseas trade

The UK Government is providing a £1.5bn loan facility to encourage foreign firms to trade with the UK. The scheme is designed to tackle the UK’s trade deficit, which reached its highest ever levels in 2012.

The Government’s credit agency, UK Export Finance, will administer the initiative through individual loans of up to £50m to help international buyers access British goods and expertise.

The facility will be in place for three years with the intention of funding “export transactions where it has not been possible to obtain lending from commercial sources”.

The aim is that the loans will be especially helpful for British SMEs hoping to export high-value goods and services in emerging markets in Asia, Africa and South America, as they effectively guarantee payment for UK companies.

Banking trade body The British Bankers’ Association and UK Export Finance are in talks about how requests for funding will be assessed and delivered.

UKTI budget increase

To help things further, the Government’s export agency, the UKTI, was given a 25 per cent increase in its budget over the next two years, worth £140m.

This is a turn around on a decision Chancellor George Osborne made in the Coalition’s 2010 spending review to cut the UKTI’s budget.

The Government has reiterated its target to double UK exports to £1 trillion and get another 100,000 companies exporting by 2020 despite the stubbornly sluggish trade performance.

Clive Lewis, head of enterprise at the Institute of Chartered Accountants in England and Wales, said the additional funds were crucial to promote the UKTI to small businesses.

“Our research shows that nearly 70 per cent of SME exporters are not aware of the UKTI and the work that they do. Exports are vital for sustainable growth and new markets are crucial given the malaise in the eurozone.”

Mr Osborne said the investment will help more companies “build [British trading capacity] overseas, and maintain our country’s position as the number one destination in Europe for foreign investment”.

It will also be spent in areas such as adding ‘international trade advisers’ in English regions and helping small businesses pay for their first visit to overseas trade shows.