UK Export Finance (UKEF) will grant automatic guarantees to working capital facilities provided by Barclays, HSBC, Lloyds, NatWest and Santander, as part of an £11bn lending package targeting British SMEs.
The UK government announced today that following talks in Westminster, the five lenders, which collectively serve half of all British businesses, agreed to a funding commitment aimed at helping companies expand into international markets and benefit from new trade deals.
It said lending will be drawn from banks’ balance sheets and will primarily target smaller enterprises. The banks and UKEF have also agreed to provide advisory support to borrowers.
UKEF will provide guarantees of up to 80% for eligible loans, and banks can apply the cover automatically for working capital facilities up to £10mn in value.
The government said the agreement “is one of the largest collective moves by the banking sector in over a decade”.
HSBC, which has pledged to make £3bn in lending available through the scheme, said its research shows that 82% of businesses that trade internationally expect to grow over the next two years.
“Yet many face barriers to accessing the capital and support they need to go global,” the bank said.
UK business secretary Peter Kyle, who convened today’s discussion, said: “Strengthening Britain’s export potential relies on British businesses having the means, motive, and opportunity to succeed in new overseas markets.
“The £11bn these banks are making available will help meet the ambitions of smaller British businesses to fully export, expand and exploit these international market opportunities.”
UKEF chief executive Tim Reid added the agreement “unlocks billions of pounds to help UK businesses compete to win overseas contracts”.
The announcement follows last year’s move by Westminster to increase UKEF’s capacity by £20bn, bringing its lending and guarantee limit to £80bn, part of the government’s first trade strategy since leaving the EU in 2020.
In 2024, UKEF announced it planned to support 1,000 SMEs per year by 2029, up from just over 200 across the previous financial year.
John Baldwin, chief executive of Santander’s corporate and commercial banking division, said the bank’s most recent Trade Barometer, its bi-annual research study, found UK businesses have “an ever-growing interest in international expansion – despite the various geopolitical challenges they face”.
“I’m proud to have worked with UKEF on the lending packages announced today, which will help power the overseas growth ambitions of businesses across the UK – and in turn boost the UK economy,” he said.
