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General Export Facility launched by UK Export Finance

The fanfare for the launch of the General Export Facility (GEF) by UK Export Finance (UKEF) last week was, I suspect, rather blunted by the lack of a trade deal with the European Union.

But this is a potentially interesting development to assist SMEs with export finance.

What is the General Export Facility?

Through GEF the UK government can provide 80% guarantees to participating banks to help UK exporters support the following facility types, with maximum repayment terms of up to 5 years:

  • Cash facilities such as trade loans
  • Contingent obligation facilities such as bonding and letter of credit lines

GEF can support facilities valued up to around £25 million.

There are currently five participating banks:

  • Barclays
  • HSBC
  • Lloyds Banking Group/Bank of Scotland
  • The Royal Bank of Scotland /NatWest /Ulster Bank
  • Santander UK

Eligibility criteria

In order to access the scheme, you must satisfy the bank’s and UKEF’s criteria. One of the key requirements is that the exporter must be able to declare:

Criteria    
In any one of the last three financial years, at least 20% of their annual turnover has been made up of UK export sales or In each of the last three financial years, at least 5% of their annual turnover has been made up of UK export sales
and
They have premises in the UK

They have employees in the UK

They pay UK or Isle of Man/Channel Islands National Insurance Contributions or Corporation Tax

They manufacture goods, deliver services or produce intangibles from the UK, which would (if required) qualify for a UK Chambers of Commerce Certificate of Origin

 

and/ or They do not solely engage in the supply of goods that have been manufactured outside of the UK or services where the person contracted to perform the services ordinarily carries on business outside the UK

 

Benefits of GEF

On the GOV.UK webpage for GEF a number of benefits of the scheme are listed two of which I paraphrase below:

  • In contrast to some of UKEF’s other schemes, with GEF UK exporters do not need to evidence any individual export contracts. The general nature of GEF will also appeal to exporters who do not routinely enter into large, single export contracts
  • UKEF has provided delegated authority to participating banks of up to £5 million per UK exporter. Whenever an application for GEF support meets certain criteria, UKEF’s guarantee will be automatically granted to the participating bank which therefore minimises application response times.

More details

The GOV.UK webpage for GEF has more information on the scheme and contact details for further guidance. These contact details also include named individuals at each of the participating banks.

And for a 49 second overview of the facility there is video – link.

PKF Francis Clark

I should also bring your attention to the Brexit hub on our website, where we will be collating information on changes that will affect businesses and individuals from 1 January 2021.

FEATURING: Richard Wadman
Richard qualified as a Chartered Accountant with KPMG in 1993. Since 2006 he has worked in Corporate Finance, firstly with the predecessor firm in Truro… read more
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