© Reuters. FILE PHOTO: Britain's junior trade minister Graham Stuart poses at the Mobile World Congress in Barcelona
LONDON (Reuters) – Britain's government said on Monday it would offer a wider range of loan guarantees to promote exports as part of a drive to boost overseas sales following the country's departure from the European Union, its biggest foreign market.
Lenders will receive a state guarantee for 80% of the money they lend to companies to support exports, up to 25 million pounds ($33 million) per business.
The guarantees will be available to support working capital and other general costs, and will not be tied to specific export contracts, which was usually the case under previous schemes underwritten by export credit body UK Export Finance.y
"The new General Export Facility will make a huge difference for entrepreneurs who need the financial backing to go global and benefit from our free trade agreements," junior trade minister Graham (NYSE:GHM) Stuart said.
Firms that exported at least 5% of their production in each of the past three years, or 20% in any single year, will be eligible for the loan guarantees, which will initially be available from HSBC, Lloyds (LON:LLOY) Bank, NatWest, Santander (MC:SAN) and Barclays (LON:BARC).
UK Export Finance said it provided 4.4 billion pounds of support for exports in the 2019/20 financial year.
Britain exported goods and services worth a total 691 billion pounds ($917 billion) last year, while imports totalled 721 billion pounds.
Almost half of goods exported last year went to the EU, and these will face significant extra red tape in the form of customs declarations from Jan. 1 when a post-Brexit transition agreement ends.
British goods exports will also face new tariffs if last-minute trade negotiations with the EU fail, and services exports are already set to incur new restrictions.
The British government has said Brexit will allow it to strike better trade agreements with non-EU countries than the bloc had been able to strike on Britain's behalf.
The biggest deal agreed so far, with Japan, largely replicates a previous deal reached by the EU.
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