UK government provides financial help to businesses after Brexit

Tuesday 8 December 2020 12:51 CET | News

The UK government has announced that it will offer extra financial help to businesses to help them cover their costs after Brexit.

British exporters will be given financial aid by the government to encourage trade and take advantage of new free trade agreements. Exporters will be able to apply for larger loans from the UK’s five high street banks backed by a partial state guarantee. This can be used to cover costs linked to exports but also to scale up business operations.

The end of the Brexit transition period on 31 December 2020 will usher in a swath of new customs procedures and costs for firms exporting into the EU, regardless of whether the UK and EU agree a trade deal.

Through its UK Export Finance (UKEF) arm — which is part of the Department for International Trade — the government will provide an 80% guarantee on money from lenders to support general exporting costs.

The new facility will support a range of trade finance products including trade loans, bonds, letter of credit lines and invoice financing. The guarantee covers facilities up to GBP 25 million, with UKEF’s support no longer tied to individual export contracts. UKEF has more than doubled the amount that banks can automatically administer to an exporter through its facilities from GBP 2 million to GBP 5 million.

Financial support will be provided by HSBC, Lloyds Bank, NatWest, Santander and Barclays, the major providers of trade finance in the country, although it is hoped other lenders will sign up to the scheme.

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Keywords: UK, government, trade finance, SCF, Brexit, trade, loans, EU, UKEF, guarantee, lenders, banks
Categories: Banking & Fintech
Countries: United Kingdom
This article is part of category

Banking & Fintech