Credit Management January February 2024

International Trade
Monthly round-up of the latest stories
in global trade by Andrea Kirkby.
More UKEF support
for SME exporters
UK Export Finance (UKEF) has announced
new measures to help SME exporters to
access more opportunities.
In doing so, UKEF has expanded
its ‘auto-inclusion’ scheme that gives
businesses fast-track access to finance
products such as the General Export
Facility which provides partial guarantees
to banks to help UK exporters with trade
finance facilities. There are two facility
types supported – cash facilities such as
trade loans, and contingent obligation
facilities such as bonding and letter of
credit lines.
As a result, SME exporters should be
able to get Government-backed support
faster without intervention from the UKEF.
At the same time, the maximum support
UKEF can offer under auto-inclusion has
doubled from £5m to £10m. Loans under
the General Export Facility have also
increased from two to five years which
means more flexible repayment terms if
required.
In addition, an agreement between
the UKEF and HSBC India may help SMEs
export to that market. A Letter of Intent
under the UKEF’s Standard Buyer Loan
Guarantee programme could involve up to
£100m in potential loans for Indian buyers
purchasing goods and services from UK
firms.
WORKING FROM HOME
AS if we need to be told. Sales of
beauty products and make-up are
soaring in the working-from-home era
as people spend more time looking at
themselves on video calls – so says a
report in The Times.
Beauty retailer Space NK reckons
that ‘Zoom boom’ has led to a 39
percent increase in make-up sales
in the six months to the end of
September. Andy Lightfoot, CEO of
the company, has said that “when you
are in a meeting room, you can’t see
yourself… “but Zoom has made people
a lot more conscious about how they
look.”
Working from home has also led
to a rise in multiple contract working
– where an employee misleadingly
holds down two or more jobs at the
same time. Even so, the point is very
clear – exporters involved in beauty
and grooming products might want to
tweak their advertising to attract the
self-conscious buyer that works from
home.
Zombie apocalypse?
THE Financial Times recently commented
on the rising risk of zombie firms –
businesses that can just about service their
debts but do no more. It said that after a
decade of ‘rock-bottom’ interest rates, a
wave of creative destruction may be no
bad thing.
It appears that corporate bankruptcies
in the US are due to hit their highest level
since 2010; they are surging in England,
Wales and the eurozone, too. This is set
to continue as businesses are forced to
refinance on higher rates, as bills rise,
and demand slows. The reality is that
many would have already gone to the wall
without COVID-era support. Most grew
because of low interest rates, but ‘sap’
productivity by ‘lowering investment and
employment for more efficient businesses’.
Regardless, the collapse of weak firms
could spread to those that are more
efficient which ‘would be problematic’.
While it’s up to regulators to monitor
private markets, and insolvency services
to ensure firms can ‘fail well, and fast’, it’s
imperative that businesses are alive to
the financial health of not only who they
sell to but also those within their supply
chain – an unexpected failure could be
problematic.
Brave | Curious | Resilient / www.cicm.com / January & February 2024 / PAGE 44