Exporters could benefit from a new government scheme which will help financially support buyers from overseas.
UK Export Finance today announced the launch of Direct Lending, which can be used by buyers of British-made capital and semi-capital goods when they’ve had difficulty securing bank finance.
Trade minister Lord Green says: “Exports play a vital role in rebalancing our economy, and where the customers of British exporters are having difficulties securing export finance from other sources, UK Export Finance can now assist by providing loans through the Direct Lending Scheme”
Under the £1.5bn scheme, UKEF will pay a loan of between £5m and £50m direct to the exporter. This means that the exporter doesn’t need to worry about late payments, but the foreign buyer can pay in instalments. The loan can be worth up to 85 per cent of the goods purchased.
UKEF is fully responsible for managing the loan and repayments.
Jim Bligh, the CBI’s head of exports policy says: “We’ve long called for a direct lending facility to help ambitious firms stay ahead of the game and overcome the hurdle of breaking into new markets, but the Government must ensure it does not adversely impact on finance options in the private market and that it is targeted at the high growth exporters who need support the most.”
Direct Lending is a form of forfaiting, which is a common source of finance for those importing machinery from continental Europe.
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