UK businesses export over £17 billion of goods and services every month. Tapping into this lucrative source of revenue can bring a range of benefits. Exporting can help you extend your market, increase turnover, improve your business’ reputation and avoid an over dependence on UK trade.
However, exporting is not without its risks. Language and cultural differences, political instability and currency and payment problems can pose a significant risk to first time or inexperienced exporters.
The UK government provides a range of support services to UK businesses exporting to other countries to help them overcome these potential hurdles.
This guide provides an overview of the help available including the roles of UK Export Finance and of UK Trade & Investment.
It also provides links to further information and assistance on how to grow your export business.
Table of Contents
Export insurance
Before your business begins exporting, it is recommended that you assess the different risks you may face and consider whether you need to insure against them. As well as physical loss or damage to goods, and faulty goods or services, you also need to consider non-payment by your customers.
For this last risk, an export insurance policy may be appropriate. This type of policy insures an exporter against the risk of not being paid under an export contract or of not being able to recover the costs of performing that contract because of certain events that either prevent the carrying out of a project or bring about its termination.
To complement cover available from the private market, UK Export Finance, the UK’s official export credit agency, offers a range of products and services, including export insurance policies for contracts to a value of at least £20,000, typically involving the export of capital equipment and project-related goods and services. If your contract is not for semi-capital or capital goods and related services, you must first attempt to obtain insurance from a private export credit insurer before applying to UK Export Finance. For more information, download the quick guide to export insurance policy from the UK Export Finance website.
Find out about insurance facilities on the GOV.uk website. See the page in this guide on buyer credit facility in support of exporters.
Advice about insurance
The UK Trade & Investment Export Finance team offers free advice about insurance. They can help you source competitive export insurance for the risks you may face in exporting.
If you would like more advice on export insurance, you can call the UK Trade & Investment Enquiry Line on Tel 0207 215 8000.
Financial help for exporters
The UK Export Finance provides guarantees to banks to facilitate their providing finance to enable overseas buyers to acquire capital goods and services supplied by UK exporters. The amount of support available depends on the risk involved. You should contact UK Export Finance as early as possible in your contract negotiations.
UK Export Finance is the UK’s official export credit agency. Find out about finance facilities on the GOV.uk website.
UK Export Finance can support bank financing by providing a guarantee. See the page in this guide on supplier credit financing facility.
Supplier credit financing facility
Certain exporters may be eligible for a supplier credit financing facility from the UK Export Finance, the UK’s official export credit agency. Under this facility, the UK Export Finance would provide a guarantee to a bank either to:
- serve as a loan to an overseas buyer to finance the purchase of capital goods and/or services, worth at least £25,000 from an exporter carrying on business in the UK
- cover payments due under bills of exchange or promissory notes purchased by a bank from an exporter carrying on business in the UK, who has received them in payment for capital goods and/or services supplied to an overseas buyer worth at least £25,000 – known as a supplier credit bills and notes facility
Read the quick guide to supplier credit financing facility on the GOV.uk website.
You might also consider lines of credit, which cover a series of contracts instead of one. Depending on the amounts of money involved, lines of credit are based on either the buyer credit or supplier credit financing facilities. They are available for contract values of £25,000 and above.
Read the quick guide to lines of credit on the GOV.uk website.
Overseas investment
UK Trade & Investment provides a wide range of free services to businesses thinking about investing overseas. It has data on over 200 countries and export sectors.
Find sector reports or read about export opportunities on the Dept for Business & Trade website.
UK Trade & Investment also provides a business opportunities service that matches UK suppliers with business opportunities abroad. Register for the free business opportunities service on the Great.GOV.uk website.
Overseas investment insurance
UK Export Finance offers insurance to UK companies which invest abroad. Find information on overseas investment insurance on the GOV.uk website.
Cover is available to investors established in the UK for investments they make in enterprises outside the UK against political risks such as war or nationalisation. Cover varies according to the type of investment but investments must be for at least three years for amounts of £20,000 and above.
Debt conversion and countertrading
UK Export Finance’s debt conversion scheme allows a proportion of outstanding debts owed to UK Export Finance by a number of countries to be converted into local currency at a discount for investment in local projects approved by UK Export Finance and the government of the country concerned.
You can negotiate to purchase the debt at a discount, and then receive local currency to invest in approved local projects in one or more of the following eligible countries:
- Bosnia
- Ecuador
- Egypt
- Indonesia
- Kenya
- Pakistan
- Serbia
- Vietnam
Typical projects include:
- education
- agriculture
- rehabilitation programmes
- commercial investments
- health and medical projects
The UK Export Finance scheme supports companies investing in this way. Applications are assessed by:
- social and environmental impact
- value for money
- the company’s experience in the field
- the resources available
Countertrading
Countertrading is a catch-all term for reciprocal trade. Barter is the simplest form, with goods (or services) being exchanged for other goods (or services). As economies have evolved, so have more sophisticated forms of countertrading.
Services and training in international trade
Export and international trade are complex areas to do business in. Developing skills and knowledge by getting some training could make a difference to your success.
Helping your business grow internationally
UK Trade & Investment staff are experts in helping your business grow internationally, providing expert trade advice and practical support to UK-based companies wishing to grow their business overseas.
Through a range of unique services, including participation at selected trade fairs, outward missions and providing bespoke market intelligence, UK Trade & Investment can help you crack foreign markets and get to grips quickly with overseas regulations and business practice.
Specifically, for companies that are just getting started in international trade, UK Trade & Investment provides:
- an export health check to assess company needs and help in developing an export action plan
- training in requirements for trading overseas
- access to an experienced International Trade Adviser
- specialist help with tackling cultural and language issues
- advice on market research with possible grant funding
- ongoing business development support
Once the initial groundwork has been done, UK Trade & Investment can offer further assistance with:
- information, contacts, advice and support from UK Trade & Investment staff in the UK and their overseas network
- opportunities to participate in sector-based trade seminars and missions
- access to major buyers, governments and supply chains in overseas markets
- advice on forming international joint ventures and partnerships
- exploratory visits to new markets
- information on new business opportunities
Find out about growing your business internationally on the Dept for Business & Trade website.
Could this article be better? Are details incorrect? Do you have something to contribute or a relevant article we can link to?
We’d love to hear from you and continue to keep this a free, useful resource for everyone! Get in touch.
Every effort has been made by the author(s) to ensure this article’s accuracy but it does not constitute legal advice tailored to your circumstances. If you act on it, you acknowledge that you do so at your own risk. We cannot assume responsibility and do not accept liability for any damage or loss which may arise as a result of your reliance upon it.
Related Guides
-
Outsourcing
Outsourcing is when you contract out a business function – a particular task, role or process…
-
Responsibilities to employees if you buy or sell a business
Under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), when all or part of…
-
When an employee resigns
When an employee wants to resign, you can try to persuade them to change their mind…