Businesses that do not yet export from the UK will be able to receive indirect backing from UK Export Finance and the British Business Bank under a financing scheme slated to launch next year.
Then-Chancellor of the Exchequer Rachel Reeves said earlier this month that the programme will target support “at the estimated thousands of SMEs with export ambitions that often struggle to secure finance”, by providing guarantees to commercial banks.
It is the first time UKEF has agreed to support working capital financing for firms that do not yet contribute to the UK’s exports, a spokesperson for the agency confirmed.
UKEF’s existing flagship guarantee scheme for SMEs, the General Export Facility, requires eligible firms to have made at least 5% of turnover from exports over the last three years, or 20% in a single year.
Only around 12.1% of UK businesses export goods or services, according to a 2024 government estimate. The country’s goods exports have fallen every year since 2022, dipping to £384.5bn in 2025, although growth in overseas sales of services has pushed overall exports up to £930.6bn.
“One of our main business priorities is to make it easier than ever for SMEs to harness the power of international markets,” UKEF chief executive Tim Reid said when the scheme was announced. “By combining access to finance, digital services and targeted support with the British Business Bank’s expertise in unlocking lending, we can support a new generation of exporters.”
Another key difference between the proposed scheme and the General Export Facility is that instead of backing each loan from a bank to an eligible business, UKEF will guarantee whole portfolios of loans to such firms, a UKEF spokesperson told GTR.
“The scheme will operate as a portfolio guarantee delivered through lenders, under which lenders build portfolios of eligible loans and UKEF provides guarantee cover on portfolio losses on a pari passu (pro-rata) basis,” they said. “Delivery will be delegated to lenders through their existing distribution channels.”
That model has long been sought by banks because it would theoretically reduce red tape by not requiring an approval process for each individual loan.
Another key element for banks is the portion of the lending that will be guaranteed, which also determines what percentage of the loan margin is allocated to the agency as a premium. Earlier this year, Barclays called on UKEF to hike the cover limit for smaller exports from the current 80%. The UKEF spokesperson told GTR the “exact percentages are subject to market engagement”.
UKEF does not see the need to nominate a minimum transaction size, the spokesperson said, although the focus will be on smaller facilities that banks struggle to lend profitably.
British Business Bank’s role in the scheme will be to “assess, onboard and manage” participating lenders.
