Export finance

SMEs should make more use of little-known GEF

Murdoch MacLennan
Murdoch MacLennan: considerable potential

Smaller firms and banks are being urged to make more use of the General Export Facility (GEF), a relatively unknown but valuable government scheme.

It is designed to boost Britain’s SME exports by providing an 80% guarantee to banks for loans to businesses specifically engaging in exports.

GEF is one of several export finance initiatives overseen by the government’s Export Credit Agency which in 2023 provided around £6.5 billion of financial support to UK exporters.

However, a specialist adviser to SMEs says it is a relatively unknown element of the overall financial support provided to exporters and is failing to achieve any real impact across the SME sector, its main target market and where there is considerable potential to drive export volume.

“Feedback from SME’s and analysis of GEF data reveals that only 5.4% or around £350m of total financial support for exporters (£6.5bn) utilises GEF, said Murdoch MacLennan, a partner and business finance specialist with Azets.”

He said: “There is considerable potential to dramatically increase the number of SMEs that are aware of GEF and the 80% government guarantee.”

But he said this potential “is being thwarted by low awareness of GEF, poor distribution and minimal marketing.”

Mr MacLennan noted that although there is no published cap on the gross amount that the government will guarantee “it is concerning that in 2022-2023 just £350m of GEF guarantees were accessed.”

He said that the Export Credit Agency needs to invest time and resources in ensuring that SMEs are aware of GEF, and that banks need to have GEF front of mind when helping their customers access export finance options.

“More banks need to proactively offer GEF as a key part of their financial support packages for the SME sector,” he said. 

“Although there is huge potential for more banks to offer GEF to their client base, SMEs still need to satisfy their bank’s lending criteria and due diligence tests. SMEs should also take the initiative and ask for GEF when negotiating financial support.

“Targeting £1 billion of GEF guarantees for SME exporters per annum as a minimum should be an achievable goal. As such, SME exports would be given a major boost if the potential of GEF can be properly unlocked”.

The GEF criteria

GEF can provide an 80% guarantee to pool of banks to support SME’s trade facilities such as trade loans and working capital with repayment terms of up to 5 years.

To qualify, companies must be able to demonstrate that in any one of the last three years at least 20% of turnover has come from UK export sales or that at least 5% of turnover has been made up of UK export sales during each of the last three years.

SMEs must also have premises and employees in the UK, pay corporation tax or make National Insurance contributions, manufacture goods in the UK or sell intangibles from the UK



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