February 22, 2011 - Anonymous
Small firms struggling to access finance to start exporting will be able to apply for loans of up to £1 million from April 2011, under a Government-backed lending scheme.
The Export Enterprise Finance Guarantee Scheme has been set up to help small businesses “compete and win business overseas”. Any small firm that is unable to get a commercial loan to export, and has a turnover of less than £25 million, will be able to apply.
“Businesses will apply in the same way they would apply for the Enterprise Finance Guarantee,” said a spokesman for the Department for Business, Innovation and Skills. “When they go to the bank for a regular loan and they’re not eligible then the bank should offer this as an alternative. To be successful with the application, businesses would need to have a credible plan of how they intend to export overseas.
“Our research shows there is demand for this, but we don’t yet know what the take-up will be,” he added. “It will be reviewed after six months, but we’re hoping that it will be as successful as the EFG.”
He added that it will give small businesses access to the credit they need to trade overseas. “It can take longer to receive payments when trading overseas, so this should enable firms that couldn’t otherwise afford to export to expand overseas,” said the spokesman.
In addition to the Export Enterprise Finance Guarantee Scheme, the Government has launched four other initiatives to support exporters:
Confederation of British Industry director general, John Cridland, said the Export EFG scheme was good news for businesses and long overdue. “There’s a particular need to tackle export under-performance in smaller businesses, so small firms should be encouraged by these new trade finance products designed to help them break into foreign markets,” he said.