Pictured above: Philip Chapman, Associate Solicitor at Wall James Chappell

The government has recently launched new initiatives by the Export Credits Guarantee Department (ECGD) and the Department for Business, Innovation and Skills (BIS) to support exporters, particularly small and medium-sized enterprises (SMEs). Philip Chapman, Associate Solicitor at Wall James Chappell solicitors, explains how Midlands exporters may seek to take advantage of this government scheme.

Mr Chapman explains that "the ECGD derives its powers from the 1991 Export and Investment Guarantees Act and its aim is to benefit the UK economy by helping exporters of UK goods and services to win business, and UK firms to invest overseas, by providing guarantees, insurance and reinsurance against loss. The ECGD export finance guarantee scheme is aimed at helping UK exporters gain access to working capital finance, both before and after shipment of goods, for specific export contracts. Similarly, the BIS export enterprise finance guarantee scheme is designed to help SMEs qualify for short-term export finance facilities that they would otherwise be unable to access. The new initiatives are aimed at SME exporters with an annual turnover of up to £25 million."

According to Mr Chapman "the five schemes of particular relevance to exporters are firstly the ECGD export working capital scheme which is designed to help UK exporters gain access to working capital finance, both before and after shipment of goods, for specific export contracts. The scheme will assist companies by enabling banks to increase exporters' cash flows. Participating banks include Barclays, HSBC, NatWest, RBS and Lloyds Banking Group."

"Secondly, ECGD bond support scheme applies where a bank issues a bond at the request of a UK exporter in favour of an overseas buyer for a UK export contract. It is designed to help UK exporters raise bonds by sharing the credit risk of the exporter failing to reimburse the bank under its counter-indemnity if the bond is called and the bank is obliged to pay the buyer."

"The third scheme is ECGD short-term credit insurance which covers a broader range of exports and is designed to protect exporters against the risk of non-payment by their buyers."

"The fourth scheme is the ECGD foreign exchange credit support scheme to help exporters' management of their exposure to foreign exchange rate movements, where exporters have taken out another ECGD product.

"The fifth scheme is the BIS export enterprise finance guarantee scheme (ExEFG) which is designed to help SMEs qualify for short-term, export finance facilities that they would otherwise not be able to access. It is aimed at SME exporters with an annual turnover of up to £25 million. The ExEFG covers facilities that are not permitted under the government's enterprise finance guarantee scheme or do not qualify for the ECGD's export working capital scheme. Eligible SMEs can access the scheme directly through participating lenders who include Barclays, HSBC, NatWest, RBS, Santander and Lloyds Banking Group.

Wall James Chappell is a long established Stourbridge based law firm providing a comprehensive  specialist legal service to both business and private clients both locally, nationally and internationally.