Access to Finance: Demand for export funding surges
THE number of companies seeking export finance is surging as increasing numbers look to overseas markets, according to TheBusinessDesk.com’s Access to Finance supplement, in association with Barclays.
According to the latest figures from Asset Based Finance Association uptake of export finance increased by 38% in quarter three 2011, compared with the same period in 2010.
While Europe – the UK’s biggest trading partner sees similar slow growth to the domestic market – more businesses are seeking opportunities further afield.
Click here to download our Access to Finance Supplement produced in association with Barclays.
Stephen Edwards, director of trade finance at Barclays Manchester, said: “There has been a quietening down in Europe – which was seen as an easy export market – but there is recognition that although it is an easy market
to trade with, competition is harder.
“The vast majority [of trade] does go to the EU but clients recognise that they need to go where the money and growth is. Africa, the Middle East and India are all seeing increased interest.”
Businesses that are starting to export, or are moving into new territories, need to ensure they have the right financial tools for the job. Not just to trade with businesses overseas but also to protect themselves and ensure they get paid.
Mr Edwards says: “There has been a return to traditional trade instruments, such as letters of credit and bills of exchange. But there are also variants of that because credit insurance has become less available.
“Things like a stand-by letter of credit are being used more in Western Europe or even UK to UK transactions. That sits in the background and only if there is a default of payment is a claim made. It’s less burdensome and more flexible.”
Click here to download our Access to Finance Supplement produced in association with Barclays.
