UKEF backs £1 million to help UK firms in overseas trade.
The support is being provided through HSBC which is extending its credit line to specialist international trade firm Synergy in Trade by £1 million.
Synergy in Trade already operates multimillion pound finance facilities focused primarily on SMEs. This additional backing by UKEF will allow Synergy to expand its funding and facilitate greater export opportunities through new letters of credit and ‘back to back’ letters of credit.
Patrick Crawford, Chief Executive of UK Export Finance, said: ‘I am pleased that we have been able to help Synergy by underwriting additional bank facilities for them. With the extra funds they will be able to support more small and mid-sized businesses. We are always looking for opportunities to help grow exports and assist UK companies who want to grow their overseas trade.’
Synergy in Trade Director David Slinger describes how it differs from other routes to finance: ‘We base our funding decision on the actual trade transaction, focusing on the quality of the product and on the contract. Provided the exporter has a secure means of getting paid from the buyer, like a letter of credit, then a major part of the risk is mitigated. Whereas a bank may not want to fund a transaction because the company doesn’t have the necessary security, we assess the risk differently and look more at the trade transaction rather than the security or lack thereof.’
The signing of this facility is the latest support that UKEF has provided through its Export Working Capital Scheme that was launched in April 2011. The scheme is part of a range of new products that UKEF launched primarily focussed on supporting the SME sector. To date these products have supported over £175 million of contracts, and through them UKEF continues to play an important role in the government’s Export for Growth campaign.
*[UKEF:United Kingdom Export Finance]