UK Export Finance steps up support for West Midland SMEs

WEST Midlands SMEs are being given more help to boost their export potential. UK Export Finance (UKEF) – the government’s export credit agency – is stepping up the level of export finance it is making available to firms in the region.

UKEF’s Export Finance Advisers (EFAs) will be working with businesses to help them tap into the support available.

Phil Potter, one of UKEF’s 18 EFAs, said: “Any business engaged in exporting recognises that there is a degree of risk in the process. Two of the main concerns are about getting paid and raising finance to cope with longer lead times.

“For many SMEs the support we offer has made all the difference in whether they secure a deal or not, particularly in challenging markets.  It has helped them to win much larger contracts than they would have normally been able to do: and enabled them to unlock the working capital to carry on pursuing new business.”
 
The increase in export finance available includes:
•         changes to the Direct Lending Scheme that provides funding to overseas buyers of UK goods and services. The changes will see a doubling of available funds to £3bn, providing more flexible conditions around the size of loans, reducing applicable interest margins and, put the scheme on a permanent footing.
•        the launch of the Export Refinancing Facility, which will help secure more competitive sources of longer term funding for overseas buyers.
 
One of the companies supported by UKEF is Stourbridge-based Vee Bee Filtration. It supplies pipeline filters and strainers, as well as filter media and meshes, for industrial and commercial use. After winning a major contract with a large US construction company, the company looked to UKEF for help.
 
Vee Bee found a bank that was prepared to offer a £2m bond facility as long as UKEF shared half of the increased risk through its Bond Support Scheme. The finance was put in place so the company could invoice its client for its up-front payment and buy the supplies needed to start work on the contract.
 
“Our clients are all blue chip companies,” said Nikki Reynolds, finance manager at Vee Bee. “We have no concerns about being paid, but you need those initial payments to buy your materials in the first place. The help from UKEF, as well as the knowledge that we have a £2m bond facility in place, enabled us to accept another large contract.”