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Export Enterprise Finance Guarantee

Martin Hodges, Head of Trade Finance at Santander Corporate Banking, unpicks the strands of a new finance option available to small to medium sized enterprises – the ExEFG.

Q: So, what is ExEFG?

A: The Export Enterprise Finance Guarantee (ExEFG) is part of a new Government-backed scheme to help fund the exporting activity of SMEs. It came out of a 2010 taskforce, which found that the existing Enterprise Finance Guarantee (EFG) scheme did not support companies trading internationally. Santander put together the first ever ExEFG earlier this year, with Norton Motorcycles.

Q: What’s different about it?

A: The scheme is geared towards companies, which find it difficult to evidence the security required by the bank to access other sources of finance. There will, however, still be a demand to prove that you can deliver on your export aims.

Q: What is the process?

A: We will go through the usual credit criteria to look into the options open to a company, but if it hasn’t been exporting for long enough to have built up a track record, for instance, then an ExEFG might be a good choice supported by risk management solutions such as letters of Credit or Guarantees. We can usually let you know if your company is eligible after a short discussion.

Q: Which companies is the scheme available to?

A: The scheme is open to SMEs with a turnover of up to £25 million. An ExEFG can be used for any number of things, including working capital to fund export orders, financing marketing overseas, setting up overseas offices or appointing agents.

Q: What facilities are on offer?

A: ExEFG is available in a variety of export related facilities, including: letters of credit; bonds; guarantees and indemnities; short-term trade loans; and invoice finance to foreign debtors. The facilities are available for a period between three months and two years, from £25,001 up to a maximum of £1 million, and subject to a 3% per annum Government premium. 

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