Your ticket to international trade

Martin Hodges, Head of Trade at Santander Corporate & Commercial, explains why Santander is taking a different approach to assessing the finance needs of business customers looking to trade overseas.

Q: What are the current challenges being faced by businesses trading internationally?

A: The main issue at the moment is being encountered by companies which want to trade internationally soon after they start-up, or those which have been established for a long time and want to make steps overseas for the first time. There is an obvious need for finance to achieve their aims, yet banks need to seek security on any investment which, in these two situations, might not be readily available. This results in a dilemma, with the Government being emphatic about the need for UK businesses to export to stimulate economic growth, yet the banks are nervous about lending to exporters without a strong and proven track record. Something has to change to address this gap.

Q: What approach is being taken by Santander to address this issue?

A: When considering the finance needs of a business looking to trade internationally, Santander is looking more at the security within the transactions themselves, as well as the business and the individuals running the business. What we want to achieve is transparency – in where the money is going and where it is coming from. To achieve this, we are talking to customers so we can understand exactly what they are doing and what they want to achieve. This involves a change of mindset: examining more detail about the parties involved, trade terms, trade cycle, whether the customer has gone through agents to mitigate the risk, and so on. Of course, we can’t lend to everyone, but strongly believe there is a responsibility on the banks to look at the bigger picture of a business before making a decision whether or not to finance them.

Q: What other help is available to businesses trading internationally?

A: In those cases where we feel we cannot rely purely on the international transaction for security, there are government schemes to help support us in lending to business customers. For instance, the Bond Support Scheme and the Working Capital scheme are both short-term funding schemes where the Government takes on some of the risk involved in a finance transaction. There is also the Letter of Credit Guarantee Scheme with respect to the confirmation or negotiation of letters of credit.

Q: What are Santander’s international credentials?

A: We have a dedicated UK team of Trade Finance specialists who provide a wide range of services and solutions to help businesses import and export and manage any funding gaps. Santander is an international bank, with 14,000 branches worldwide and is committed to helping customers who want to grow their business overseas. Through working with our colleagues in our new International Global Unit based in Madrid, we are able to leverage the experience and local market knowledge of the teams throughout the wider Santander Group, in order to provide our customers and prospects with more informed solutions.

Q: How else is Santander working to boost overseas trade?

A:In quarter four this year, we will launch a new and exciting promotion offering a very clear and competitive ‘all in’ tariff for a bundle of related trade services and funding. Watch this space for more details! For more details about Santander’s Trade Finance services and solutions, or to discuss any aspect of your international business, contact your local Relationship Director.

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John Carroll - Helping businesses achieve International success. Head of Product Management & International Business, Santander UK