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UK Export Finance

WIN, FULFIL AND GET PAID FOR EXPORT CONTRACTS

Liz McCroryExport Finance Manager, Northern Ireland

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► Operate at no net cost to the taxpayer – we charge a premium that covers the risk plus a contribution to our running costs

► Provide award-winning support for UK exporters:

► We received the TXF News Exporters’ Choice Award in 2015 and 2016

About UK Export Finance

We:

► Are the UK’s export creditagency (ECA)

► Were established in 1919 as the Export Credits Guarantee Department – the world’s first ECA

► Support the export of goods, services and intangibles

► Complement rather than compete with the private sector

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UKEF’s mission is to ensure that no viable UK export fails for lack

of finance or insurance from the private sector

We help UK exporters:

• Win export contracts by providing attractive financing terms

• Fulfil orders by supporting working capital loans

• Get paid by insuring against buyer default

We work with colleagues in DIT, HMT and other departments in

the UK and overseas to support HM Government’s export

aspirations

Our Mission

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Key Statistics – 2015-16

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• UKEF’s support falls into two broad categories

How Does UKEF Support Exporters?

Mid/Long

Term

Products and

services that

support the

overseas

buyer

•Providing guarantees to banks on the loans they give to overseas

buyers to purchase goods and services from UK based

companies

•Providing lending directly

•Support in the Capital Markets

Short Term

Products and

services that

support the

exporter

•Reducing or removing the risk of non – payment from the

overseas buyer through insurance products

•Helping to support the bonding requirements of the contract

•Assisting with working capital needs

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Helping UK Exporters Win Contracts

Overseas

Mid/Long term products and services that support overseas buyer:

UKEF can give overseas buyers attractive long-term financing that makes UK exporters’ offering more competitive.

We provide support through:

► 100% unconditional guarantees to banks lending to overseas buyers to source from the UK

► Lending directly to overseas buyers

Our international business development team works closely with DIT and Posts overseas to identify appropriate opportunities.

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Helping UK Exporters Fulfil Contracts

UKEF can help companies access the working capital they need to fulfil a contract, giving them the ability to take on more contracts and increase their turnover. We are now able support exporters of all sizes and sectors, including exporters of services

We can offer:

► Export finance guidance

► Guarantees to UK companies’ banks who lend working capital for export orders

► We can also support contract bonds, freeing up working capital for exporters

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Role Of Export Finance Managers

Guidance to Exporters

Can provide advice or information

alongside our own financial or

insurance products

Can help companies make the right

choices and help them to make

exports happen

Export Finance

Act as local points of contact to

introduce exporters and businesses with export potential to finance providers,

credit insurers, insurance brokers,

trade support bodies and sources

of government support

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• We provide government guarantees to participating banks who issue bonds

on behalf of UK exporters

• Support extends to all bonds related to an export contract

(e.g. performance, warranty, advance payment, bid bonds)

• Cover up to 80% of the bond value; no minimum or maximum contract values

or duration

Eligibility

• UK based exporter

• 20% Minimum UK content

Benefits

• The bank is able to issue the bond

• Sharing the risk with your bank enables it to issue more bonds on your behalf

or to issue a bond without requiring as much of your cash or collateral -

improves your working capital

UKEF Bond Support Scheme

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► Greenray Energy Solutions provides servicing solutions to the oil and gas sector.

► When Greenray won a number of export contracts in the Middle East and Asia, UKEF provided HSBC with a £1.25m guarantee to issue the required bonds without restricting the funding available to Greenray.

“Without UKEF’s support, we could not have fulfilled these contracts, and we would have had to turn away customers. Working with HSBC and UKEF meant that we were able to access the finance we needed to sell to new markets and increase our revenue.”

Anita Paulie, Commercial Director at Greenray

Case study: Greenray Energy Solutions

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• We provide government guarantees to participating banks providing trade

finance loan facilities to UK exporters to fund export contracts

• Specific contract

• Covering up to 80% of the loan value

Eligibility • UK based exporter

• 20% Minimum UK content

Benefits

• The principal benefit for the UK exporter is that it is able to obtain the

necessary working capital finance from its lender to support an export

transaction in circumstances where its lenders may not have had sufficient

risk appetite for the full facility amount.

Export Working Capital Scheme

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Terminator Breaker Company: breaking new ground

With help from UK Export Finance, Terminator Breaker Company Ltd was

able to access finance to support two significant export contracts.

Ian Dawson, Managing Director at Terminator Breaker Company Ltd,

said:

“Our strategy has always been to chase dynamic markets with high

demand,” says Ian Dawson, Managing Director of Terminator Breaker

Company Ltd. “For us, overseas sales have always been a core part of

our business plan.”

Export Working Capital Scheme – Case

study1

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Making Sure Exporters Get Paid

We can help exporters manage risks in challenging markets, ensuring that they get paid even where the private market is not able to offer insurance. We can offer:

► Insurance against non-payment

► If the buyer does not pay or the contract is cancelled, the exporter is covered under our policy

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► CIGA Healthcare, based in Ballymena, is a

family run healthcare products firm making

rapid self-diagnostic kits for pregnancy,

cholesterol, diabetes, temperature and

heart monitoring.

► In 2014, CIGA won a US$47,000 new

contract in South Africa.

► UKEF provided export insurance,

providing CIGA with assurance of being

paid as it entered a new market.

“UKEF are there to help and for the South

Africa contract, they were there at the right

time in our contract negotiations, which was

critical for us.”

Neill Armstrong, director, CIGA Healthcare

Case Study: Export Insurance to South

Africa

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Trade Finance Risk Management

Understanding Exporters’ Risk

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If the contract with your trading partner is in a currency other than your

local currency, there is an exchange risk.

There are a number lf alternatives when dealing with this risk.

• Do not cover the risk

• Cover the risk by using a forward contract

• Open a Foreign currency ‘Hold’ Account

• Use a combination of the above

Exchange Risk - How to Deal With it:

Liz McCroryExport Finance Manager, Northern Ireland

Tel: +44 (0)7435 32 32 31 Email: elizabeth.mccrory@ukexportfinance.gov.uk

General enquiries:internationalenquiries:@ukexportfinance.gov.uk

For further information please visit:www.gov.uk/uk-export-finance