The General Export Facility (GEF) is a vital financial solution for export businesses, helping UK exporters by providing a government guarantee to lenders of up to 80% of the credit risk on facilities typically worth up to £25 million, without an export contract.
Since its launch in 2020, Bathgate Business Finance has used the facility to help seven businesses secure a total of £1.3m.
One such recent example is a client working in the Energy Renewables industry, with significant contracts lined up with projects both in the UK, Europe and the Far East.
As with many businesses in the sector, cashflow in the period between tendering and gaining projects is always a challenge and we were asked to identify a solution to raise £250k, to help smooth out some of the bumps.
Further obstacles included the fact that the business held no assets on their UK balance sheet, owing to being a subsidiary of an internationally-based company, as well as the company directors not wishing to inject additional capital and being adverse to support with any kind of guarantees.
While this greatly limited the market, the team at Bathgate identified GEF as a product that would suit the client’s needs perfectly and was able to get the full £250k approved, with the client drawing down an initial amount of £185k against this.
Gordon Andrews, Managing Director, Bathgate Business Finance, said: “GEF is supported by the UK Export Finance scheme, with the UK Government providing an 80% guarantee to the funder if the loan fails.
“This meant that the directors could look at this loan knowing that as long as they had adhered to its qualifications, their guarantee would be limited to 20% of any balance outstanding.
“The loan is extremely flexible, with multiple drawdowns up to the £250k limit allowed during the year, with no penalties for early settlement after a three-month period has elapsed. This was ideal for our client as they wanted to match the funds to separate projects covering the next 12-month period.
“The UK Government guarantee on the GEF gives confidence to the lender, but also to the client, which is what makes the facility so useful for clients facing similar challenges.”
Want to talk to someone about the GEF and how your business might benefit? Contact the Bathgate Business Finance team on firstname.lastname@example.org or call 0151 625 7323.