Government agency UK Export Finance (UKEF) is protecting UK exporters by covering them against the risk of non-payment from overseas customers who become insolvent.
UKEF extended its Export Insurance Policy (EXIP) which covers up to 95% of the value of an export contract.
The policy now covers transactions with first-world nations including Australia, Canada, the European Union, Iceland, Japan, New Zealand, Norway, Switzerland and the United States.
Export credit insurance is usually offered by Governments to cover trade with countries where commercial trade credit is less readily available.
Good news for exporters to the EU and USA
Jonathan Porteous, Head of Banking and Finance at legal firm Stevens & Bolton, told the Daily Update the move was “very sensible” and will “benefit many UK exporters who have never had cause to use export finance assistance in the past, if, say, their exports are currently only to the EU and North America”.
Minister for Exports, Graham Stuart MP, said:
“Exports play a crucial role in our economy and it’s right that UK businesses trading internationally are protected during this challenging time.
“That’s why we are offering a guarantee to these businesses that they will get paid, so they can continue to export with confidence and support the UK economy.”
Getting the message out to exporters
The challenge now is to spread word of the new guarantee, says Porteous. He said:
“It will be essential to get the message out to these exporters urgently so that their business can be kept afloat. It is great news to see that the expansion of credit insurance to these countries is with immediate effect.”
The UK joins other European countries including France, Spain and Germany in introducing enhanced export credit support as economies throughout the continent grapple with the economic impact of the virus.
UKEF is the world’s largest export credit agency and celebrated its 100-year anniversary last summer.