Introduction to UK Export Finance
This section provides information on UK Export Finance and its products for exporters who are new to us. It includes links to more detailed information that can be found elsewhere on the UK Export Finance website.
What is UK Export Finance?
UK Export Finance is the UK’s export credit agency. As a government department (formally named the Export Credits Guarantee Department) that operates under an act of parliament, we complement the private market by providing government assistance to exporters and investors, principally in the form of insurance policies and guarantees on bank loans.
Our range of products and services has recently changed, providing the potential to assist a wider range of UK exporters. We offer:
- A range of credit insurance and financing products to complement the commercial finance and insurance markets; and
- Political risk insurance on overseas investments.
Why do exporters need help from UK Export Finance?
When an exporter gets an order to supply goods or services to a buyer overseas, it can ask to be paid upfront - at the time the buyer places the order, or before the goods and services are delivered if the exporter needs time to make the goods. This is a safe way of exporting because the exporter knows it will get its money before the goods or services are delivered. However, this approach might also mean the exporter will not enter as many export contract as it could because its buyers may require time to pay, i.e. credit terms. Most buyers these days need credit from their suppliers. For example, a buyer might be unwilling to place an export order unless it is allowed to pay for the goods or services only when they have been delivered. This means that the exporter has to offer credit for 30, 60 or 90 days, or however long it takes for the goods to arrive, before the buyer will pay and the exporter will receive payment. In fact, most exports from the UK are sold on short credit terms, usually up to 180 days.
When an exporter gives credit to its buyer it faces two particular problems. First, it has to wait for its money; this affects its cash-flow. Second, it is exposed to the risk that the buyer won’t or can’t pay for the exports; for example, between the time the exporter ships the goods and them arriving at the buyer's premises, the buyer may have gone bankrupt and be unable to pay. This could then lead to the exporter becoming insolvent if it involved a large sum of money.
Exporters can go to their bank or to specialist financial organisations to help them get finance, and to credit insurers to get insurance against the risk of not being paid. But if some exporters are unable to get help from these private sources, UK Export Finance may be able to assist.
More sources of information designed to help businesses who wish to trade internationally can be found by following the link to 'Other trade promotion and advice' on the right hand side of this page.
Who does UK Export Finance support?
In the last year we have supported business in the automotive, construction, electricity, healthcare, industrial processing, oil and gas, petrochemical, water treatment, and satellite sectors.
Under our Export Insurance Policy, we can support all exporters, large and small, and all types of UK exports (goods and/or services), with contract values as low as £20k. UK Export Finance cover is available for most overseas markets.
At present, we do not typically provide:
- cover for exports to any European Union country and certain countries belonging to the Organisation for Economic Co-operation and Development (OECD) where the manufacturing period under that contract plus any period of credit given to the buyer total less than two years; and
- cover unless it can be demonstrated that cover is unavailable from the private sector.
Which UK Export Finance products might be relevant to me?
The following products are available through an application to UK Export Finance. Applications for loan guarantees will need to be supported by a financing bank.
The following UK Export Finance schemes are available through an application to a participating bank, and are designed to make it easier for exporters to get the support they need.
If exporters are experiencing difficulty getting the support they need from their bank, we would encouraged them to suggest the use of these schemes to their bank and, if necessary, contact UK Export Finance directly.
For further details on which product might be relevant, exporters should call the UK Export Finance Customer Services helpline on +44 (0)20 7512 7887.
What does it cost?
UK Export Finance charges premium on transactions on a case-by-case basis.