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on an overseas buyer has been insured, so a lot of the risk has been removed. It doesn’t remove the risk of a company becoming insolvent but it remains a substantial safeguard. Given that ECGD’s new products have

only recently been released it is too early to say how much of an impact they will have on exporter SMEs’ ability to gain funding but the early signs are good, according to Crawford. He says: “The banks have responded

well and I think they will address a real need. Exporters’ organisations and the CBI have welcomed the products. We have done what they asked and we will see what level of demand materialises. “It certainly brings us into line with

countries such as France and Germany who have had these products for far longer and they get used. We can’t foretell what will happen but we are certainly producing a more level playing fi eld. “We need to make sure that SMEs

are aware that these products are now available because they have not been in

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the market since 1991. We are running an active campaign to publicise them to SMEs and, in partnership with UK Trade & Investment, we are organising regional seminars and working with exporters’ representative bodies such as the British Chamber of Commerce, the British Exporters Association, the Federation of Small Businesses and the CBI, plus specifi c industry bodies such as the Association of Construction Engineers, the British Ceramics Federation, the SMMT and the Engineering Employers Federation.” ECGD’s initiatives also have the

support of senior government fi gures. Speaking at the launch of a seven-point charter for British business in May, Business Secretary Vince Cable said: “We’re rightly proud of British fi rms and making sure they can increase their exports to a worldwide audience is vital if we are to rebuild our economy. We also know the UK already has a great reputation as a place to do business and we want to do all we can to make sure foreign investors come here.”

“EXPORTERS PLAY A FUNDAMENTAL ROLE IN SECURING THE UK’S ECONOMIC RECOVERY, SO IT IS CRUCIAL THAT THEY ARE ABLE TO ACCESS THE FINANCE THEY NEED” STEVE PATEMAN, HEAD OF UK CORPORATE AND COMMERCIAL BANKING, SANTANDER

HOW TO GET A LOAN BACKED BY CREDIT INSURANCE...

1. Find the right product • On-Demand Contract Bonds These amount to a promise by the bank to pay a certain sum on demand by the buyer. They operate a bit like a post-dated cheque, which makes them attractive to the buyer. • Advance Payment Guarantee This gives the buyer peace of mind when it pays an exporter the money for a contract upfront as, if the supplier fails to perform, the buyer can demand the payment back. • Progress Payment Bond This guarantees that the goods in question will perform as requested until the end of a warranty period. 2. Make an application SMEs should apply to ECGD for credit insurance but contact their bank for ECGD’s other new products, listed on its website: www.ecgd.gov.uk. Each bank lists a named representative with contact details. “We have simplifi ed the credit insurance policy and greatly widened its eligibility so it’s no longer limited to capital and semi capital business,” says Crawford. “It applies to all types of exports to buyers in emerging markets – not members of the OECD or the EU – and is granted on a transaction- by-transaction basis. The EU removed the barrier on insurance to rich markets but we did not avail ourselves of that opportunity.” 3. Complete the transaction The UK exporter pays a fee for the issue of the bond and, under a counter indemnity given to the bank, agrees to reimburse the bank in the event of a call on the bond. The guaranteed bank then pays ECGD a guarantee fee. ECGD, in turn, guarantees up to 50 per cent of contract bonds in respect of UK export contracts, and up to 80 per cent for advance payment and progress payment bonds.