Short-term loans and bonds to help UK businesses fulfil orders from customers overseas and receive payment.
Exporting goods comes with large upfront costs, which can put a strain on your business’ finances and working capital.
Export finance eases that burden by taking on some of the risk of trading abroad.
This type of finance is designed to help UK businesses sell overseas.
There are different products that can help you get paid and access short-term loans and bonds to be able to fulfil orders from other countries.
If you're looking to sell your product or service abroad, there are different types of export finance available to you.
Bond or guarantee
As part of the terms of the contract, many overseas customers will ask for your bank to issue a bond or guarantee in return for payment.
This allows the customer to 'call' the bond from the bank if you don't fulfil your side of the deal.
These finance products can take the form of:
- advance payment bonds
- performance bonds
- warranty bonds
Letter of credit
This guarantees that you'll receive payment on time, for the full amount agreed in the contract.
If you're unable to make a payment in full or in part, the buyer's bank will cover any shortfall.
This reduces the risk for you, as seller, and any potential finance providers.
Working capital loan
There are many providers in the UK that offer loans to help businesses fulfil overseas contracts and orders.
When securing a loan, you can borrow against assets, including invoices.
If you're finding it difficult to secure export finance because of the risks involved, you may be able to get a guarantee or insurance from a third party, reducing the lender's risk and making securing finance more possible.
When you apply for export finance, the provider will assess your business. Before they make a decision, they will look at things such as:
- your credit history
- your ability to repay
- assets on your balance sheet
- your finances
You can use export finance to:
- diversify and increase sources of revenue for your business
- grow your customer base internationally
- make your international offer more competitive
Defaulting and your credit report
As with any loan, if you default on your repayments (in other words, fail to make them), you may have to pay charges.
This might also affect your credit report.
There might be a charge for arranging letters of credit and bonds and guarantees.
You need to be aware of the full cost of any services you require.
Established, with assets and a trading history
Approaching your bank first is usually a good place to start when looking for export finance.
Your bank should know your business best, so it’s often helpful to approach them in the first instance to look at the options available.
If they’re unable to help, then other banks and lenders may also be worth looking into, particularly if they’re experienced when it comes to export finance.
If your bank or other lenders can’t support your business, then you may be eligible for government-backed finance or insurance from UK Export Finance.
If you’re uncertain about anything to do with export finance, you should seek independent advice.
UK Export Finance
UK Export Finance (UKEF) is the UK government's export credit agency. It can help you sell your product overseas, by providing export insurance and guarantees to lenders.
In overseas markets, it may be more difficult to get payment upfront for a product. This means if your business wants to trade abroad, you might need to put down significant security before you're approved for finance which can put pressure on your working capital.
UKEF’s trade finance products help to free up working capital to fulfill orders by providing guarantees to lenders through its Bond Support Scheme and Export Working Capital Scheme.
It can also help businesses scale up their exports without the need of a specific export contract through its General Export Facility.
UKEF’s Export Insurance Policy can help exporters manage risks in challenging markets, ensuring that they get paid even where the private market is not able to offer insurance.
For more information, visit the UK Export Finance All products and services.
Other finance options
|Business stage||Established with assets and a trading history|
|Business stage||Any but must have invoices|
Leasing & Hire Purchase
|Business stage||Early stage to established with a trading history|
Enter your postcode to find business support and case studies from businesses within your region. You'll be taken to our interactive map.
Securing funds and controlling debt
Funding can be critical to keeping a business afloat and positioning it for long-term success, especially in uncertain financial times.
But, knowing the right place to turn to for guidance can be a challenge.
With tips on everything from debt and equity financing to accessing Community Development Finance Institutions, our Guide to Building Business Resilience could help your business prepare for the future.