UK Government Programmes ….… …… for supporting UK Exporters 3 rd April 2012

1. UK Government Programmes ….… …… for supporting UK Exporters 3rd April 2012 Mark LynamInternational Manager

2. Introduction • UK government provides a range of support schemes to help UK businesses obtain funding. • UK Export Finance is the UK's official export credit agency that provides support for exporters (previously Export Credits Guarantee Department - ECGD). • Services provided include: • insuring UK exporters against non-payment • helping overseas buyers to purchase goods and/or services from UK exporters by guaranteeing bank loans to finance those purchases; • insuring UK investors in overseas markets against political risks. • The Department for Business, Innovation and skills (BIS) launched the Enterprise Finance Guarantee (EFG) in 2009. • To support exports, which was excluded from EFG they have now launched the Export EFG scheme (ExEFG).

3. Schemes Available • Letter of Credit Guarantee Scheme • Supplier Credit Financing Facility • Buyer Credit Facility • Bonds and Guarantees Support Scheme • Working Capital Support Scheme • Export Enterprise Finance Guarantee Scheme (ExEFG)

4. Letter of Credit Guarantee Scheme • Risk sharing between the exporters Bank & UK Export Finance • UK Export Finance guarantees confirmations added to letters of credit from emerging markets. • Features: • LC’s with repayment terms of up to 1 year • Exports have to be outside OECD developed markets • Banks will be indemnified for risk sharing of up to 90% • Exporters eligibility will be subject to our normal transactional due diligence • Benefits: • may enable a Bank to confirm LC’s even if a Bank does not have the risk appetite for the full amount • exporter is protected against default of the foreign buyer and the foreign bank

5. Supplier Credit Financing Facility • Scheme is aimed at exporters of Capital goods or services • Application must be received by UK Export Finance before the contract is signed • UK Export Finance guarantees that the buyer will pay the amounts due via the following 2 facilities: – • Supplier Credit Loan Facility – a loan to an overseas buyer to finance purchase of capital goods and/or services • Supplier Credit Bills and Notes Facility – to cover payments due under bills of exchange or promissory notes from an exporter in the UK, who has received them in payment for goods or services supplied to an overseas buyer.

6. Supplier Credit Financing Facility • Benefits: • Exporter paid as soon as goods are shipped • Buyer has a number of years to pay • Bank receives guarantee for up to 85% of the contract value • Features: • Minimum UK content – 20% • Minimum contract value £25K • Credit period – 2 to 5 years • Offer of credit is extended to the buyer by the supplier

7. Buyer Credit Facility • Scheme is aimed at exporters of Capital goods or services • Application must be received by UK Export Finance before the contract is signed • UK Export Finance provides a guarantee to cover a loan to an overseas borrower to finance the purchase of capital goods and/or services • Benefits: • Exporter is paid as though it has a cash contract • Bank receives guarantee for up to 85% of the contract value • Features: • Minimum UK content – 20% • Minimum contract value £5M • Credit period – Min 2 years • Loan agreement is between overseas buyer and the Bank

8. Bond Support Scheme • Scheme to help exporters raise contract bonds • Bonds issued in favour of overseas buyers and UK Export Finance guarantees up to 50% of value of the bond (for performance bonds) or 80% of value of the bond (for Advance Payment bonds) • Minimum bonding facility supporting a sales contract must be £1M. Individual bonds can be for less than £1M*. • UK Export Finance shares the risks with the bank of not being reimbursed by the exporter following a call on a bond

9. Bond Support Scheme • Features: • Minimum 20% of UK originated material. • UK Export Finance will not charge separately but will take a percentage of bank risk fees. • Benefits: • Able to issue bonds when the Bank may not normally have sufficient appetite • Helps the exporter increase Working Capital under APG bonds • * For bonding requirements under £1M, ExEFG may be more appropriate.

10. Export Working Capital Scheme • Introduced to assist UK exporters gain access to Working Capital Finance (both pre and post shipment) for specific export contracts • UK Export Finance provides guarantee to cover credit risks associated with approved working capital facilities • Minimum value of contract £1M (or otherwise not eligible for support under BIS’ Export Enterprise Guarantee Scheme). • Maximum finance envisaged - £750,000 of which UK Export Finance Guarantees 50% of the risk • Min 20% UK content • Max Term: 2 years – no min term

11. Export Enterprise Finance Guarantee • Provided by Department for Business Innovation and Skills • Covers export facilities not permitted under ‘domestic’ EFG • Features: • £25M annual turnover cap • Targeted @SME’s with an annual turnover of up to £25M. • Covers: • Bonds and Guarantees • Trade Loans (pre and post export) • Invoice Finance • Also covers standard trade instruments e.g. L/C’s as part of an export contract. • BIS will guarantee up to 60% of facilities from 3 months to 2 years • Govt fee 3% • Facility amounts £25,001 - £1M • Covers new / additional facilities only (not restructuring of existing limits)

12. Further Information • UK Export Finance website: • www.ukexportfinance.gov.uk • BIS website re Export EFG: • www.bis.gov.uk/policies/enterprise-and-business-support/access-to-finance/ex-efg