Azets

Don’t look a GEF horse in the mouth

SME exports could grow if more companies in Yorkshire were aware of and using the General Export Facility (GEF), according to top 10 UK accountancy and advisory firm Azets.

GEF is a relatively unknown but valuable government scheme designed to boost Britain’s SME exports by providing an 80% guarantee to banks for loans to businesses specifically engaging in exports.

It is one of several export finance initiatives overseen by the government’s Export Credit Agency which in 2023 provided around £6.5 billion of financial support to UK exporters.

The GEF scheme, however, is a relatively unknown element of the overall financial support provided to exporters and is failing to achieve any real impact across the SME sector, its main target market and where there is considerable potential to drive export volume, according to Azets.

Russell Turner, regional managing director for Azets in Yorkshire, said: “Feedback from SMEs and analysis of GEF data reveals that only 5.4% or around £350m of total financial support for exporters (£6.5bn) utilises GEF.

“There is considerable potential to dramatically increase the number of SMEs that are aware of GEF and the 80% government guarantee.

“Although there is no published cap on the gross amount that the government will guarantee it is concerning that in 2022-2023 just £350m of GEF guarantees were accessed.

“There is considerable potential for GEF to help SMEs build their export business however this potential is being hindered by low awareness of GEF, poor distribution and minimal marketing.”

Russell said that the Export Credit Agency could invest more time and resources in ensuring that SMEs are aware of GEF, and for banks to have GEF front of mind when helping their customers access export finance options.

“Given that the government underwrites up to 80%, it would be good to see more banks proactively offering GEF as a key part of their financial support packages for the SME sector, subject to these SMEs satisfying their bank’s lending criteria and due diligence tests.

“SMEs could also take the initiative and ask for GEF when negotiating financial support.”

He added: “Targeting £1 billion of GEF guarantees for SME exporters per annum is an achievable goal.

“Hitting this target would give a major boost to SME exports and show the potential of properly unlocking GEF.”

Azets has 334 staff in Yorkshire at offices in Leeds, Bradford and York.

The GEF criteria:

GEF can provide an 80% guarantee to pool of banks to support SME’s trade facilities such as trade loans and working capital with repayment terms of up to five years.

To qualify, companies must be able to demonstrate that in any one of the last three years at least 20% of turnover has come from UK export sales or that at least 5% of turnover has been made up of UK export sales during each of the last three years.

SMEs must also have premises and employees in the UK, pay corporation tax or make National Insurance contributions, manufacture goods in the UK or sell intangibles from the UK.