For any country, exports are very important. Exports lead to countless opportunities such as employment, economic growth, and many more. This is probably the reason why the UK has made an initiative to encourage exports as much as they can through export subsidies. This article will provide information on how exporters in the UK are able to proceed with their market plans in providing goods overseas and ultimately strengthening the UK economy. Most information is available through one UK government website.
UK Export Finance
An export credit agency can be either a private or a government body that aids exporters in acquiring financial aid needed for their export business. The official export credit agency in the UK is the Export Credits Guarantee Department. They operate under the name, UK Export Finance, and aims to help strengthen the UK economy by providing financial aid to exporters and subsequently invest overseas through lending and loans.
UK Export Finance helps exporters through several ways:
- They help exporters acquire loan faster. The agency assures the bank that it is liable for payment in case there is loss or damage. Banks take on this opportunity and allow the exporters to acquire the loan.
- They help exporters to deal with bonds. People on the other end of the exports need to set contract bonds to make sure that exporters hold up their end of the bargain. In case exporters are unable to provide the goods and services mentioned in the contract, the agency takes on the role of compensating for loss and damage on behalf of the exporters.
- They help exporters gain access to working capital finances. Working capital finance is the amount of money a business can produce when needed. Exporters need access to this in order to secure the goods and services required in the export business. There are times when this is hard to produce and may even take longer than expected due to several reasons. The agency expedites the process of gaining access to working capital finances.
- They help exporters in helping banks come up with a letter of credit. A letter of credit is a document from a bank that ensures exporters payment in case the buyer is unable to provide it.
UK Export Finance provides an export insurance policy that protects exporters in the event when overseas buyers are not able to provide payment to them. Exporters can apply for export insurance provided they are eligible:
- The exporter must have an operating business in the UK.
- The exporter must be unable to obtain credit insurance from any commercial market.
- The buyer/s overseas must have an operating business.
The UK government helps its business to grow in a way that it will expand overseas, into the international markets, and ultimately strengthening the UK economy. This will take any market plan of any UK business to a successful execution.