A West Midlands exporter has become the first UK business to take advantage of new financial support from the government’s credit agency UK Export Finance (UKEF).
Tech firm Simworx and their bank HSBC used UKEF’s General Export Facility – a new scheme which provides partial guarantees to banks, increasing access for SMEs to trade finance support.
Simworx supplies simulation technology to the international theme park and entertainment industries, including 3D and 4D simulation attractions and 4D effect cinemas.
The business has built a strong presence in the emerging markets of the Far East, Middle East and Northern Europe.
Simworx secured a seven-figure facility from HSBC UK, guaranteed by UKEF, that will ease their cash flow constraints as they expand internationally.
This will enable Simworx to raise advance payment guarantees to secure and complete overseas contracts worth between £1 and £8 million.
With exports contributing to 90% of its turnover, the ability to raise payment guarantees is critical for Simworx’ expansion plans.
Export finance supports businesses to grow overseas markets by helping them maintain a positive cashflow during the extended periods that it can take to be paid internationally.
It can take the form of loans, insurance policies or bank guarantees.
General Export Facility
UKEF’s General Export Facility provides guarantees to banks to give them greater security when providing export finance support to traders.
Though the new scheme, UKEF supports banks through cash facilities such as trade loans and trade financing instruments including letter of credits.
UKEF can support funding packages valued up to around £25m through the new facility.
Marco Forgione, director general of the Institute of Export & International Trade, recently called the facility “a great move forwards”.
Graham Stuart MP, Minister for Exports, said the new facility is specifically designed to support more UK SMEs enter international trade.
“Simworx is the first of what I hope will be a long list of SMEs who we will back through GEF,” he said.
“Research shows that companies that export are more productive, profitable and pay higher wages on average than their non-exporting peers, so we are determined to help more companies start that journey in support of the Chancellor’s Plan for Jobs.”
UK Export Finance (UKEF) – part of the Department for International Trade – provided £4.4bn in support for UK exports in the 2019-20 financial year, helping 339 UK companies trade with 69 countries – a 30% increase on the previous financial year.