£1tn exports too high a target, but SMEs have a role
In its recent report on international trade, the British Chambers of Commerce (BCC) challenged the UK Government’s attempts to double exports, claiming that the target of £1 trillion a year by 2020, set only three years ago, would not be reached until 2034. “Our businesses have the potential to meet the target”, it argued. “They need ongoing support and access to finance to help them thrive on the world stage”.
While the scene painted by the BCC is necessarily a broad-brush perspective, there are expanding pockets within the business community which have achieved conspicuous success at international trade; aided by specialist organisations which provide alternative funding solutions.
The Birmingham-based Trade & Export Finance Ltd (TAEFL) is one organisation which works with well-run SMEs and Mid-Cap businesses, where traditional sources of funding such as banks and invoice discounters are either inappropriate or not forthcoming with the support required. The TAEFL name reflects a broader base than export finance alone, however. The emphasis is as much on trade finance for deals within the UK as it is on supporting overseas sales.
As Mark Runiewicz, the founder and CEO of TAEFL explained, the issues underlying the financing of sales are similar wherever the companies are trading. “Manufacturers may have to purchase components or raw materials from suppliers on long lead times to fulfill an order.
“The situation is made more difficult when those items have to be imported by sea from the Far East. Smaller businesses are usually held back by not having the funds to cover these stages of the production and sales cycle.”
£1 million SME fund initiative by Trade & Export Finance
In an initiative launched earlier this year, TAEFL established a £1 million fund to help SMEs in the Midlands finance the purchase of the goods and materials they require to meet orders. The scheme has now been extended to businesses across the UK; a reflection of the demand for this kind of support out in the marketplace.
What started off in 2010 as a consultancy providing support and advice for the SME community has evolved into a multi-faceted financial services group. It would appear that the key to the success that TAEFL has achieved over the years is its experience in mixing and matching types of funding to meet individual clients’ requirements.
The company has been active in sponsoring clients on peer-to-peer lending platforms, for example. But even here, there is no ‘one size fits all’ approach. By working with multiple loan platforms, TAEFL has been able to select the particular lending model that best reflects the clients’ needs.
UK EXIM Ltd and UK EXIM Finance Ltd are two specialist finance companies within the TAEFL group which have responded to the growing demand for finance. The companies employ their own resources along with funds raised on the strength of the group’s credibility in the financial markets. Mark Runiewicz again: “The business case for ‘alternative finance’ is strong. There is a clear requirement for specialist providers prepared to think out of the box in developing flexible solutions acceptable to their clients.”