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Survey reveals trade worries

Fear of not being paid limits Scots firms willingness to export

Port of Grangemouth

Exporters say they need help with finance

More Scottish SMEs would export if they were confident of being paid, according to new research.

Concerns over cash flow, including late payment and a shortage of working capital has contributed to an unwillingness of firms across the UK to export.

Despite the low level of exporters among privately-owned SMEs north of the border – just 14% – new data shows Scotland outperforming the UK average for growth and exports.

Those trading only domestically saw growth of 11% over five years compared to 8.4% for the UK, while those that export reported growth of 16% (15.2% for the UK).

The research has also confirmed that SMEs are not fulfilling their export potential, due to a number of barriers.

It is now estimated that 19% of SMEs UK-wide believe they could export but do not, and 60% of potential exporters cite access to finance as a key factor in their export plans.

Censuswide for UK Export Finance (UKEF), the export credit agency, found that just under a quarter of Scottish SMEs (22%) said a risk of not being paid by foreign buyers limits the extent to which their business exports internationally.

Late payments are the most critical issue nationwide, with 63% of UK firms citing it as a barrier to entry. Whilst 52% of payments are made at the point of supply, 45% of sales happen on credit.

This means that at any one time SMEs are owed an average of £64,000 in late payments, with 11% owed between £100,000 and £250,000. The consequences of this can result in damaging ripple effects that have a greater impact on SMEs compared with larger businesses.

The right finance and insurance can make all the difference for a company that is looking to sell overseas

– Louis Taylor, CEO UK Export Finance

In Scotland, specific financial barriers to export include concerns about cash flow or lack of working capital (cited by 19%), the length of time it takes to be paid (21%), the risk of not being paid at all by a foreign buyer (22%) and a lack of information about foreign markets (12%).

UKEF supported over 250 businesses last year. CEO Louis Taylor said: “The right finance and insurance can make all the difference for a company that is looking to sell overseas. There’s a wide range of specialist support on offer from both private sector providers and from UK Export Finance working with private sector providers, and we’re here to help UK companies access that support and realise their global ambitions.”

Secretary of State for International Trade, Liz Truss, said: “Finance is a key barrier coming between SMEs and their export potential. If small businesses were to export more, Britain would see even more stronger economic growth.

“In its centenary year, UKEF continues to enable companies from across the UK to expand their global reach by helping them succeed abroad. That’s why it is at the heart of my plan to get businesses ready to trade as we leave the EU.”



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