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The government has unveiled a major new lending initiative designed to help UK businesses take on work overseas more easily. Under the scheme, five leading UK banks have committed to providing £11 billion to support businesses looking to invest, recruit and grow into international markets.
This represents a substantial joint effort by the participating banks, which together serve half of all British businesses. As a result, the funding is likely to be genuinely accessible for a wide range of companies, rather than remaining a purely theoretical option.
How the new lending works
The funding itself will be provided directly by the banks, with UK Export Finance (UKEF) offering a guarantee of up to 80% of eligible loans. For working-capital loans of up to £10 million, banks will be able to apply the guarantee automatically.
In addition to the finance, businesses will also have access to guidance and support from their bank relationship managers, as well as UKEF’s regional Export Finance Managers.
What this could look like in practice
This package may be particularly helpful where a specific overseas opportunity is creating short-term cash-flow pressure due to its timing or scale. For example, a business might secure an order from an overseas distributor and need to purchase materials upfront. Alternatively, a company may wish to establish a team to bid for an international contract and require funding to cover initial set-up costs or to provide greater certainty around working capital.
Expanding into international markets can be an effective route to business growth. The government-backed guarantee attached to this lending could make financing such expansion more achievable and help unlock opportunities that previously felt out of reach.
Next steps for businesses
If you already trade overseas, or have identified international opportunities that you have been unable to pursue, it may be worth discussing this lending package with your bank and considering how it fits alongside your existing facilities.
If you would like support in assessing overseas opportunities or would benefit from a broader review of your business finances, please get in touch at any time. We would be very happy to help.
