Many small and medium-sized companies are losing out as global export opportunities fizzle away because of financial barriers, according to new research.
A survey by Birmingham-based Trade and Export Finance (TAEF) showed two out of three businesses had to fund their own export business because they cannot obtain bank support.
TAEF recently surveyed 1,200 companies for its International Trade Survey and found that one in three cited a lack of finance as a barrier preventing business, with companies turning over less than £5 million the hardest-hit.
Chief executive Mark Runiewicz said TAEFL regularly have to arrange finance for exporters with firm orders who are unable to get sufficient backing, despite more security being made available by UK Export Finance.
He said: “The UK is missing export opportunities. Businesses have got orders but these are being turned away due to the lack of finance.
“The fact of the matter is there is a strong export demand, not just from Europe but around the world.
However, though the banks appear to have little appetite to provide the funding, he said.
Mr Runiewicz said he believes that this is in fact often due to a combination of an inability to present a well worked logical business case that the banks can understand and a reluctance on the part of many bankers to deal with anything more complex that “vanilla” lending secured against the owners’ personal assets, a combination that results in UK export suffering.
“A lot of companies have given up and they are funding themselves through directors’ loans and finance from family and friends,” he added.
TAEF’s research showed that 42 per cent of respondents had heard of UK Export Finance – the official Government export credit insurer – and yet only six per cent had been able to obtain finance through the programme.
Mr Runiewicz believes that this programme could solve many funding issues and TAEF is supporting companies to obtain support.
The research found that Europe, China and India were deemed the top three markets for growth by respondents, ahead of North America, the Middle East, Brazil and Russia. A total of 53 per cent of those surveyed had an export strategy.
TAEF launched a consultancy in Birmingham in February, and has since grown from two to seven people covering the UK.
Between £2 million and £3 million worth of business is being written at the Birmingham office each month.