Trade and export finance refers to finance and insurance products that reduce the risks that come with selling internationally, such as:
- guarantees or letters of credit to help you get paid
- working capital loans to help fulfil orders
- insurance against not getting paid (credit insurance)
Start with your bank
Your bank knows you and your business so are better placed to advise on the best finance options for your situation.
If your bank can’t help, shop around for a bank that can. Some banks will be more experienced in export finance than others.
Business loans come in different shapes and sizes. As with raising any finance, you’ll need a well-considered plan that shows the growth you expect to achieve and how you’ll pay back the debt.
The amount you’re offered will depend on:
- how secure your business is
- your business’s financial and credit history
- whether the loan is made against a security or guarantee
If your company is less than 24 months old you could be eligible for a Start Up Loan.
Get finance support from government
If you’re exporting and your bank or credit insurer can’t help, you may qualify for government-backed finance or insurance from UK Export Finance (UKEF).
UKEF is the UK’s export credit agency. It aims to make sure no viable export fails due to a lack of finance or insurance. It helps support exports from the UK by:
- guaranteeing loans and financial products to UK exporters and their suppliers
- offering finance to overseas buyers of UK goods and services
- providing insurance for higher-risk countries outside of certain richer countries, such as in Europe and North America
- applying internationally agreed standards in due diligence to deter bribery and corruption in transactions officially supported by export credits
- applying policies relating to the environment, social and human rights, anti-bribery and corruption and sustainable lending, which are monitored by the Export Guarantees Advisory Council, who can advise the Secretary of State
Contact UKEF for free, impartial guidance on getting finance for exporting. Select ‘Get finance’ from the enquiry options. You’ll be asked about your exporting experience, where you work and how you want to be contacted.
Use a finance platform
There are many websites that match businesses to financial products.
The government requires banks to refer companies they can’t help with a loan to:
Other finance platforms include:
Businesses that want to lend are matched with businesses that want to borrow through an online platform. The loan is usually made up of small amounts from several lenders. These loans are often processed more quickly than a bank loan.
Interest rates are either fixed or lenders bid for a loan based on the interest rate they are prepared to lend at.
You have to submit accounts, go through credit checks and provide a personal guarantee from a company director to register for a loan on most platforms.
Private equity companies invest in established companies that are planning to grow significantly. They will want a large share of the business, often enough to have control. They will introduce operational structures and improvements and expect a place on the board.
The British Business Bank has a Finance Hub which can help you to understand and access finance options for your business, including equity finance.
Angel investors are individuals who invest in early stage or start-up companies. They usually invest their own money so are prepared to take more risks. They are often successful entrepreneurs who can offer business connections and advice. Visit the UK Business Angels Association.
Venture capital companies invest other people’s money so usually want a proven investment. They invest at different stages in a company’s growth with more money being available for larger companies. Visit the British Private Equity & Venture Capital Association (BVCA).
Corporate venture capital is similar to venture capital, except the investor will be an established company looking to invest its own money. They tend to invest in a start-up in the same industry as a way to keep ahead of industry developments.