TAEFL provides support for successful UK exporter
Reports abound of container ships from the Far East unloading in Britain and returning light. It is clearly wrong to infer from those stories that the UK is not pulling its weight on the export front. High profile manufacturers such as Jaguar Land Rover and JCB have achieved spectacular success in recent years on the back of their reputation for quality and delivery, but there are legions of UK companies which have been selling equipment and services overseas for a century or more.
Without eye-catching yellow paint or a Jaguar car badge in sight, however, these companies get on with the job of winning orders and delivering against them. They tend to go un-noticed by analysts trying to make a poorly-researched point about Britain’s ‘failing’ export performance.
Financing orders is a major problem for UK exporters
Anyone who has examined the performance of exporters will soon realise that financing orders is a growing problem faced by SMEs which cannot get their bankers to finance those contracts during the development and implementation phases. The TAEFL group of companies has worked successfully with many SMEs since its inception to bridge that vital gap in the commercial process.
Exporting is not always plain sailing for larger companies, however. Resistance from the banking sector may be lower than for an SME – particularly where a strong international track record is apparent – but there are situations where even these businesses have to look outside their own resources to solve problems which arise.
A good example is a UK company which provides specialised engineering equipment and support services across the globe. It has been in business for more than a century. A problem arose when it embarked on a contract worth almost £1 million to supply equipment to the vehicle sector in an African country.
Part of the agreement was that the customer paid 30% of the total project cost upfront; a fairly standard term of contract. While there was little risk of the business failing during production and delivery, the overseas company nonetheless sought a guarantee for the £300k it had agreed to pay. Normally, a bank would be prepared to assist by making such a commitment on behalf of its client, but the supplier was in the throes of changing banks at the time. Neither institution was prepared or able to assist under the circumstances. The company instead turned to TAEFL for assistance with raising the guarantee bond.
TAEFL accepted the challenge by providing the funds required by the customer in Africa. Given the ‘quality’ of the UK company involved, it was able to insure the deal and therefore protect its outlay. The new client was therefore in a position to proceed with its export contract; adding £1 million to the UK’s export total for the year. But it is £1 million that would not be added without the support of Trade & Export Finance.