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Gov launches General Export Facility to support exporting SMEs

UK Export Finance has launched a new financial support product for small exporters in a radical shake-up of governmental international trade support. 

In partnership with the UK’s leading commercial banks, the new scheme aims to give SME exporters access to working capital to support Covid recovery. 

The new scheme is backed by government, providing an 80% guarantee on financial support given by lenders. It’s hoped the General Export Facility will encourage more small businesses to explore exporting their products and services and take advantage of new and future trade agreements. 

Minister for exports, Graham Stuart, said on the launch of the scheme that: “UKEF’s support for smaller businesses is shifting up a gear. 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. It will help us bring genuine optimism back to exporters.

“We were the only top ten exporting nation to grow exports last year. I’m determined for that success to continue as we recover from Covid-19. By transforming access to the world’s best export credit agency, we can unlock the entrepreneurial energy needed to make that a reality.”

Read more: Business groups urge Brexit negotiators to find compromise and agreement

Businesses will be able to apply for finance through the UK’s give largest banks backed by a UKEF guarantee to free up working capital which can be used to support everyday costs associated with exporting, including fulfilling contracts, paying staff and building inventory. 

Those banks are:

  • HSBC
  • Lloyds Bank
  • Natwest
  • Santander
  • Barclays

Other lenders will join the scheme in the months ahead. 

If your organisation is one of the thousands who have been unable to fully prepare for Brexit, then our Brexit FastTrack service could help you #BeBrexitReady, and fast. Find out more here.

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UK food and drink exports fall 13% in 2020

Food and drink exports from the UK have fallen by 12.9% so far in 2020 as manufacturers struggle to deal with the Coronavirus pandemic and uncertainty surrounding Brexit. 

The data, released by the Food and Drink Federation, showed that exports to key markets including Spain were significantly down (almost 34% into the Spanish market), whilst sales of the otherwise export success story of whisky dropped the most – down 19% to just over £900 million. 

Q3 2020 saw an 11.6% exports decline compared to the same period last year, with both exports to the EU and non-EU markets falling. 

Head of international trade at the Food and Drink Federation, Dominic Goudie, commented on the findings that ensuring a quick return to growth will be essential to the industry as the UK looks to continue its economic recovery from the pandemic. 

The UK’s food and drink sector is also struggling to find enough vets, an issue which could cost up to 75% of trade volume into the EU from next year.

Export health certificates must be signed by an official veterinarian to confirm that certain food or animal products meet import requirements, but a lack of qualified and available official vets in the UK could see delays. 

In September this year, the British Meat Processors Association warned that Britain simply doesn’t have enough vets to deal with export inspections post-Brexit,  with chief executive Nick Allen commenting that: “We have been pressing the Government for three years now to lay out the details of exactly how these barriers to trade will be dealt with. They have known since the beginning that we will need an army of extra qualified vets to cope with the 500% increase in workload.”

Read more: Brexit offers ‘best chance’ of banning live animal exports

“All the guidance in the world is useless if we are not able to complete required export paperwork because of a chronic shortage of vets. If this is not addressed, £175 million per month of meat exports will be at risk.

“The bottom line is that British companies cannot prepare effectively for Brexit because the UK Government is not keeping to its side of the bargain by putting in place the right measures and resources and failing to give us the answers we desperately need.”

If your organisation is one of the thousands who have been unable to fully prepare for Brexit, then our Brexit FastTrack service could help you #BeBrexitReady, and fast. Find out more here.

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UK and Kenya sign economic partnership agreement

The UK and Kenya this week signed an economic partnership agreement which will ensure all companies operating in Kenya can continue to benefit from duty-free access to the UK market.

The deal is, in essence, a translation of the terms previously agreed between the EU and the East African Community and has scope for further EAC states to join in the future.

Worth £1.2 billion last year, the agreement seeks to support jobs and economic development in Kenya whilst also ensuring tariff-free access for key imports into the UK including tea, coffee and spices, vegetables and flowers – worth a combined £250 million alone. 

The UK is a key market for Kenya, accounting for 43% of all vegetable exports and almost 10% of cut flowers, whilst 2,500 UK forms currently export goods into the Kenyan market, including machinery, electronics and technical equipment supplies.

Ranil Jayawardena, the UK’s international trade minister who signed the deal in London alongside counterpart Betty Maina, commented on the agreement that: “I am delighted that today we have signed a trade agreement with Kenya. This deal makes sure businesses have the certainty they need to continue trading as they do now, supporting jobs and livelihoods in both our countries.

Read more: Signed, sealed and delivered: UK signs first major independent trade deal in 47 years

“Today’s agreement is also a first step towards a regional agreement with the East African Community, and I look forward to working with other members to secure an agreement to forge ever-closer trading ties.”

Over the last two years, 55 new trade agreements have either been signed or agreed in principle as the UK continues the countdown to Brexit proper on January 1st. 

For the latest Brexit news and opinion, visit our Brexit Knowledge Bank.

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Business groups urge Brexit negotiators to find compromise and agreement

Company bosses from some of the UK’s leading firms have warned UK Brexit negotiators against brinkmanship as talks look set to resume following a stand-still earlier this week. 

As Boris Johnson and Ursula von der Leyen were called in to bridge a gap both negotiation parties were struggling to close, business leaders have warned that firms are already overwhelmed by dealing with the ongoing pandemic and that clarity on trading arrangements with the EU are urgently needed with just weeks to go.

Deputy director of the CBI, Josh Hardie, commented on the latest talks: “We always knew the political leaders would have to step in. It is essential they do that. The political brinkmanship and delay is paid for by communities.” 

Less than a month ago, leading UK business groups from across industry sectors urged Brexit negotiators to find compromises and find agreement in a bid to avoid a no-deal exit on January 1st. 

Over 70 groups, representing millions of workers from across automotive, aviation, chemical pharma, tech and FinTech sectors have been alarmed by the stop-start nature of talks, and have warned that securing an agreement with just days until Brexit for real ‘matters greatly for jobs and livelihoods’. 

A poll last month by the Institute of Directors showed nearly one in four companies would not be ready for the end of the transition period, whilst only half said they were fully prepared. Preparations have without a doubt been hampered by the ongoing pandemic, with smaller firms, in particular, struggling to juggle both the immediate threat of Covid and the upcoming impact of Brexit. 

Read more: Over 40% of importing & exporting SMEs have made no preparations for Brexit

Richard Torbett, CEO of the Association of the British Pharmaceutical Industry, commented then that: “With each day that passes, business resilience is chipped away.”

“It is absolutely clear that it’s in nobody’s interest — and certainly not patients — to face the future with uncertainty around how medicines will be regulated, tested and moved throughout Europe and the UK.

If your organisation is one of the thousands who have been unable to fully prepare for Brexit, then our Brexit FastTrack service could help you #BeBrexitReady, and fast. Find out more here.

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Over 40% of importing & exporting SMEs have made no preparations for Brexit

At the time of writing, there are just 33 days until the end of the transition period. And whilst 2020 has been incredibly difficult for businesses across sectors, Brexit will wait for no company. 

Research recently released from Aldermore found that 47% of SMEs who import goods and services from the EU have made no Brexit preparations, whilst 43% of small firms who export into the EU have yet to act either. 

Group managing director of business finance at Aldermore, Tim Boag, commented on the findings that: “2020 has been an extremely difficult year for SMEs, as many have been profoundly impacted by the Covid-19 pandemic. 

“With the Brexit transition period coming to an end on 31 December, businesses who trade with the EU now face a new set challenges, particularly if there is no-deal. Tariffs could be introduced on many imports and exports, which will have an impact on costs for businesses, and even if a trade deal is agreed there’s still likely to be significant changes to prepare for, such as additional checks and documentation on goods as required by both the UK and the EU.”

The average SME derives around 30% of their revenues from business and customers in the EU, and one in four small business owners say the think Brexit will worsen the economic trauma already faced in mitigating the pandemic. However, only 15% think there will be supply chain issues, despite some UK ports already struggling this winter to deal with Christmas demand. 

Read more: Visit our free Brexit Knowledge Bank for free Brexit downloads, webinars and advice

“Our research reveals that many SMEs are generally unprepared for Brexit or are delaying plans to address the impact until after the end of the transition period. Whilst the delay in preparing for Brexit is understandable given the ongoing impact of the pandemic, the potential wide-ranging effects of Brexit on many businesses means it’s crucial that SMEs begin to take steps to prepare,” Boag continued.

“Businesses should consult the Government’s guidance for SMEs post-Brexit and work out how VAT, tax and duty, and other regulatory changes will impact them and their supply chain.  Aldermore has created a Brexit hub with key information for businesses to help SMEs best prepare for the transition and the challenges and opportunities that lie ahead.”

If your business is one of the many who has yet to properly prepare for Brexit, now really is the time to act. At Go Exporting, we’ve developed a Brexit FastTrack service which will deliver a comprehensive Brexit impact review and transition plan for your business. Prices start from just £950 – find out more here.

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Brexit Transition: Business Strategy & Operations (Webinar)

This month (November) we hosted a webinar as part of Business Wales’ Excelerator Consortium’s growth programme looking at how the Brexit Transition will affect business strategy.

Watch the full webinar below, and learn more on the Excelerator Consortium’s YouTube channel here.

Learn more about preparing your business with our free Brexit Knowledge Bank, or seek a fast, cost-effective audit with our Brexit FastTrack service.

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End of the EU transition – are you ready? (Webinar with Business Wales)

Over the last few months we’ve joined Business Wales for a webinar series supporting local companies to navigate Brexit and the road ahead. 

This episode looks at the upcoming end to the EU transition period and asks whether your business is ready.

What are the implications at the end of the transition period?
How do you identify the specific challenges to your business?
How do you address the challenges and maintain your exports, and what are the opportunities and how can you make the most of them?

Watch the webinar in full below and watch even more great business advice content over on Business Wales’ YouTube channel here.

Watch more Brexit webinars and learn more about how your business can prepare in our free-to-access Brexit Knowledge Bank.

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‘Very unlikely’ all exporting businesses will be ready for the end of the Brexit transition period

The National Audit Office has warned in a new report that it is ‘very unlikely’ that every company that deals in UK/EU trade will be fully prepared for the end of the transition period, saying that flaws in the Government’s Brexit planning will likely lead to significant disruption. 

The report says that a lot of attention has been paid to firms importing from the Single Market with the Government looking to ease administrative burdens on UK firms and that it won’t be applying full import controls from January first – even if a free trade agreement has been established before then. 

This will support businesses importing goods from Europe, but less attention has been given to UK companies who primarily deal in exports into the Single Market, with the National Audit Office warning that a ‘reasonable worst-case scenario’ could see anywhere from 40% – 70% of lorries not being ready to meet EU customs requirements. 

Read more: UK auto firms spend £735m on Brexit preparations, warn of no-deal damage

The National Audit Office said with its’ report that: “Despite the funding being committed by government, there remains significant uncertainty about whether preparations will be complete in time, and the impact if they are not.”

The British Exporters Association agrees with this assessment, noting that the Government has prioritised imports and that exporters have encountered poor communications with guidance lacking detail or definition – even misleading. 

Is your business fully prepared for Brexit? See how our Brexit Audit services can help you get Brexit-ready. For more news and insights, check out our Brexit Knowledge Bank.

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UK auto firms spend £735m on Brexit preparations, warn of no-deal damage

Automotive firms in the UK have spent over £735 million preparing for Brexit, with over £235m already having been invested this year.

That’s according to research from the Society of Motor Manufacturers and Traders (SMMT), which published its figures alongside a last-minute plea fo the Government to agree a zero-tariff, zero-quota trade agreement with the EU.

It says a no-deal scenario could cost the UK auto industry almost £50bn over the next five years.

Mike Hawes, chief executive of SMMT, commented that: “As the UK-EU FTA (free trade agreement) negotiations enter the endgame, now is the time for both sides to deliver on promises to safeguard the automotive industry.

“Securing a deal is absolutely critical but it cannot be any deal.

“To work for UK automotive, it must deliver for UK products and that means securing the right terms and conditions that allow our exports – now and in the future – to be zero-tariff and zero-quota trade.”

Read more: Irish firms struggling to get to grips with Brexit customs requirements as Covid hampers preparation efforts

“A deal that failed to achieve this would be the equivalent to no deal at all, devastating jobs and slamming the brakes on the UK’s ambitions to be a world-leading manufacturer and market for electrified mobility and battery technologies.”

SMMT reports that 67% of companies across the auto sector are doing everything they can to prepare for new Brexit processes come January 1st next year, whilst seven in 10 have secured new identification numbers.

Is your business fully prepared for Brexit? See how our Brexit Audit services can help you get Brexit-ready. For more news and insights, check out our Brexit Knowledge Bank.

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Irish firms struggling to get to grips with Brexit customs requirements as Covid hampers preparation efforts

Over half of Irish businesses have admitted they’re struggling to understand new customs clearance procedures that are due to come into effect next year. 

That’s according to a survey by customs clearance service Declaron, which quizzed 300 Irish firms on their Brexit preparedness. 

The survey also found that nine in 10 medium to large companies had seen Brexit preparations hit by Covid management, with 37% overall saying they have yet to start planning for the UK’s departure from the single market at all. 

Declaron CEO, Michael Nolan, commented on the survey results that: “There are certain steps that every business must now take to be able to import and export with effect from January 1 and inaction now puts the efficiency of their trading with the UK at risk.”

Nolan urged firms to not stop their preparations given that Brexit with delivering ‘guaranteed tasks’ what Irish businesses will need to deal within just a few weeks time – predominantly in the form of creating and submitting customs declarations. 

Read more: Canada or Australia – what are the benefits and shortfalls of each type of trade deal?

Carol Lynch, Declaron director and partner in BDO warned that Irish firms are sleepwalking into a ‘trade agreement trap’. 

“Even when a Trade Agreement is concluded, there will still be a requirement for import and export declarations. The agreement only means that customs duties may not be payable. Compliance obligations actually increase rather than decrease. The delay in the service agreement being finalised cannot be seen as reason to delay preparations.”
Is your business fully prepared for Brexit? See how our Brexit Audit services can help you get Brexit-ready. For more news and insights, check out our Brexit Knowledge Bank.

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