I ask this question in light of a recent decline in the number of businesses which feel that they understand how to export.

And I think it is a question which demands to be asked, because for every challenge in exporting, there is also a huge opportunity. To name just a few, it can diversify and de-risk your portfolio, be one way of achieving economies of scale, and generally support growth – exporters typically achieve half of their revenue from export sales.

The challenge

Although exports are key to unlocking business growth, smaller businesses cannot always meet requirements which commercial lenders set for turnover and exporting history. Larger businesses are also more likely to have existing knowledge about how to export, the right infrastructure and a familiarity with foreign markets and potential buyers. This is reflected in the correlation we see between the size of a business and its likelihood of exporting.

It seems reasonable to say that there is a knowledge gap between SMEs and large enterprises. I can’t blame would-be exporters for feeling wary about what could be serious disruption to your cashflow and very real risks of being paid late or not at all.

However, one lesson that I have taken from a career working with businesses is this: although small businesses can face great hurdles in reaching international markets, the hurdles are rarely unique, and they often involve (a lack of) finance.

An unexpected ally

If businesses have a strong offer and a bankable proposition, even the finance does not need to be a problem. After all, 4 in 5 of the UK’s exporters are SMEs. And yet at the same time, only around 11% of smaller businesses export. Even allowing for the fact that some businesses will never want to export – which is perfectly fine – there is a lot of untapped potential.

There is in fact a whole industry in export finance support which is much better known to banks than it is to small businesses – I want that to change. You may not have heard of ‘export credit agencies’, but they respond exactly to the issues which generations of entrepreneurs have faced in trying to bankroll their overseas growth.

UK Export Finance is one of them, and it can help UK businesses finance their export journey with government-backed support, whether that’s working capital or insurance.

This applies to small businesses too. Some of our products have been tailored to support small exporters to obtain access to working capital and guarantees. There are conditions, like existing export sales – but when a business reaches the right stage in its export journey, we can help.

In some cases, we are also able to help first-time exporters to obtain credit insurance.

To be very clear about it – we have a mandate to ensure that no viable export slips through the net just because businesses have trouble arranging the right finance. If in doubt, you can speak with one of our managers across the UK who can help you with information on payment methods and risks, the types of finance available, trade finance, and foreign exchange risks.

If even one small business is being held back from exporting by a lack of knowledge about its finance option, that is one too many. So, if you are reading this and recognise yourself – are you ready to take the leap?

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