BExA invited to share views with Minster for Small Business
BExA Co-Chairman Geoffrey de Mowbray has today [24 April 2020] engaged in a conversation with Paul Scully MP, Minster for Small Business, during which he was invited to share BExA’s views on what government can do to support small businesses who are struggling to export due to the impacts of Covid-19.
The conversation took place during a conference call between the Minister, BExA, and four other business representative organisations. Five SME BExA members were also invited to listen in to the call.
The call was initiated to focus on the areas of exporting that businesses may need help in navigating during these difficult times. It also gave participants the opportunity to ask questions on behalf of businesses that they represent directly to the Minister in order for changes to policy to be considered at a senior level.
De Mowbray focused BExA’s feedback to the Minister on three key issues for the Association’s SME members: the government’s Coronavirus Business Interruption Loan Scheme (CBILS); trade credit insurance for new transactions; and grants and equity.
In terms of CBILS, BExA understands that there have been considerable challenges accessing these loans. While BExA welcomes the recent clarification from the British Business Bank that exporters are indeed eligible for the scheme, the Association believes that a relaxing of the lending criteria or an increase in the government’s guarantee from 80% to 100% is necessary to improve the lending process and ensure that more businesses get the financial support they need. The introduction of a rate cap has also been suggested.
With regards to credit insurance, it is BExA’s view that it is essential that both the private market and UK Export Finance (UKEF) are supporting new transactions to enable businesses to continue and grow their exports. BExA this week wrote a letter to the Chancellor outlining the Association’s concerns, and calling for a treasury backed reinsurance scheme, as proposed by other industry bodies, which would help get UK business back on its feet, inject confidence in the business community and complete the investment circle.
BExA is also keen to see the acceleration of the implementation of UKEF’s General Export Facility to enable non-contract specific cover for export contracts; and for UKEF to take the lead on initiating changes at the OECD to allow export credit agencies to cover both an 85% guarantee – as they currently do – and the 15% downpayment, which banks are having a hard time pricing given the current market volatility. BExA plans to continue its advocacy efforts on both of these matters.
Finally, in terms of grants and equity, BExA welcomes the recent £1.25bn coronavirus package to protect firms driving innovation in the UK, especially given the critical role of innovation during this period. Nevertheless, BExA questions whether the government is considering any further support for this sector, and asks what new initiatives could be expected to support the private sector's appetite for venture capital. “It is vital that we sustain our exports and use this as an opportunity to grow the number of exporting SMEs,” says de Mowbray. “To do this we need UKEF’s General Export Facility operational, we need sufficient capacity and cover in the insurance market, and we need grants for exports.”
Posted 24 April 2020