The Government has launched a new export finance guarantee scheme, targeted at SME exporters.

The General Export Facility scheme will provide an 80 per cent Government guarantee on financial support of up to “around £25 million” from lenders to support the general costs of exporting.

To be eligible, a business must certify that at least 20 per cent of its annual turnover has been from exports in any one of its last three financial years, or that at least five per cent of its annual turnover has been from exports in each of its last three financial years.

Businesses must also meet several other criteria, including having premises and employees in the UK and pay Corporation Tax or National Insurance in the UK (or the Isle of Man of Channel Islands).

They must also manufacture goods, deliver services or produce intangibles from the UK, which would qualify for a UK Chambers of Commerce Certificate of Origin.

Additionally, businesses applying for the scheme must not solely supply goods manufactured outside the UK or services provided by a person who ordinarily carries on business outside the UK.

Businesses will be able to access the scheme directly through HSBC, Lloyds Bank. Natwest, Santander and Barclays, with other lenders expected to be added in ‘due course’.

The guarantee will be provided automatically for facilities of up to £5 million that are approved by the lender. UK Export Finance approval will be required for larger facilities.

The finance available through the scheme including trade loans, bonds, letter of credit lines, Cap Ex and invoice financing, with maximum repayment terms of up to five years.

Unlike previous export support schemes, the new scheme is not tied to individual export contracts and can be used to fund general costs linked to exports and scaling up operations, including fulfilling multiple export contracts, labour costs, building inventories and easing cash flow constraints.

Graham Stuart, the Minister for Exports, said: “UKEF’s support for smaller businesses is shifting up a gear. The new General Export Facility will make a huge difference for entrepreneurs who need the financial backing to go global and benefit from our free trade agreements. It will help us bring genuine optimism back to exporters.

“We were the only top ten exporting nation to grow exports last year. I’m determined for that success to continue as we recover from Covid-19. By transforming access to the world’s best export credit agency, we can unlock the entrepreneurial energy needed to make that a reality.”

Stephen Pegge, Managing Director of UK Finance, said: “Supporting British exporters at this time is vital, which is why UK Finance and five of the main export lenders have been working closely with UKEF on the development of this new guarantee scheme.

“We expect business to apply from the new year as the General Export Facility enables lenders to support an even wider range of small and medium-sized firms, giving businesses the confidence to win new contracts by having an agreed revolving facility in place.”

Businesses requiring support worth more than £25 million should contact their local UK Export Finance Export Finance Manager.