UK Export Finance and British Business Bank will launch a joint scheme next spring to help smaller companies access working capital and growth finance for overseas trade.
The scheme is intended to support small and medium-sized businesses that already export, or want to export, but struggle to secure the finance needed to fulfil international orders, enter new markets, or scale operations.
UKEF will provide a guarantee on a portion of eligible portfolio level losses, while lenders will retain a share of the risk. The British Business Bank will assess, onboard, and manage commercial lenders participating in the scheme.
The guarantee structure is designed to reduce lender costs and support more scalable cash lending facilities, including term loans and working capital. The government said eligibility criteria would be broad, with the scheme open to SMEs across all sectors.
Business Secretary Peter Kyle said: “Smaller businesses across the UK have the ideas, ambition, and talent to succeed on the world stage, but too often they struggle to get the finance they need to reach their full potential. This new partnership will help more businesses break into overseas markets, win new customers and turn local success into global growth.”
Tim Reid, chief executive of UK Export Finance, said: “UK Export Finance exists to ensure no viable UK export fails for lack of finance, and this new joint scheme with the British Business Bank is a significant step towards furthering this mission. One of our main business priorities is to make it easier than ever for SMEs to harness the power of international markets. By combining access to finance, digital services and targeted support with the British Business Bank’s expertise in unlocking lending, we can support a new generation of exporters.”
Louis Taylor, chief executive of the British Business Bank, said: “The new scheme announced today has the potential to transform UK economic performance and competitiveness on the global stage. Bringing together specialist expertise from across UK Export Finance and the British Business Bank to design and implement this new scheme is a great example of how public finance institutions can collaborate and amplify each other’s impact for the benefit of UK smaller businesses.”
Export growth is often constrained by cashflow rather than demand. A company may have confirmed interest from overseas buyers but lack the balance sheet strength to fund inventory, production, freight, certification, insurance, or payment delays. That problem is sharper for smaller manufacturers, food and drink producers, creative businesses, specialist suppliers, and service companies entering unfamiliar markets.
Longer trading cycles make the financing challenge harder. Overseas contracts can require deposits to suppliers, upfront production, performance guarantees, currency management, and tolerance for delayed payment. Domestic lenders may be cautious where repayment depends on unfamiliar customers, different legal systems, or markets exposed to political and currency risk.
The new scheme also connects with wider changes in UK trade. Shipping costs, geopolitical disruption, customs requirements, and more complex supply chains have made export growth harder to manage. Even where trade agreements reduce barriers, companies still need finance, advice, logistics capability, and confidence that working capital will not be locked up for too long.
Recent analysis of consulting export growth showed how international demand can offset weaker domestic conditions. The same principle applies across a wider group of sectors, though smaller businesses often need more practical support to absorb the risks of cross border expansion.
Lenders may view the portfolio guarantee as a route into smaller export loans that would otherwise be uneconomic to assess through bespoke underwriting. Borrowers will judge the scheme on speed, pricing, documentation, facility size, and the number of participating lenders prepared to support smaller exporters with modest but commercially important requirements.
The programme will not remove export risk. Customer concentration, foreign exchange exposure, payment terms, product compliance, shipping reliability, sanctions screening, and market specific demand still require careful management. It does, however, target a long-standing weakness in the UK’s export base: companies with viable international prospects can be held back not by ambition, but by working capital timing and lender caution.
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