Tapping into export markets can bring a range of benefits. Exporting can help you extend your market, increase turnover, improve your business’ reputation and avoid an over dependence on UK trade.
However, exporting is not without its risks. Language and cultural differences, political instability and currency and payment problems can pose a significant risk to first time or inexperienced exporters.
Before your business begins exporting, you should assess and insure against the different risks you will invariably face. As well as physical loss or damage to goods, you also need to consider non-payment by your customers and insurance against the risks associated with faulty goods or services.
Buyer and supplier credits
Buyer credits are designed to support export orders, involving the sale of high value goods and services, worth at least Â£1 million. They make it easier for your customer to arrange bank financing, as the Export Credits Guarantee Department (ECGD) guarantees the loan.
Overseas investment insurance
The Export Credits Guarantee Department (ECGD) offers flexible, low-cost insurance to UK companies which invest abroad. Find information on overseas investment insurance at the ECGD website.
Debt conversion and countertrading
Debt conversion is a way of investing in the poorer countries of the world. It helps countries to convert foreign currency debt into local currency debt. You can negotiate to purchase the debt at a discount, and then receive local currency to invest in approved local projects.
Countertrading is a catch-all term for reciprocal trade. Barter is the simplest form, with goods (or services) being exchanged for other goods (or services).
Local currency financing
Local currency funding helps overseas borrowers whose local currency may fall. If they borrow in another currency such as sterling or US dollars, they could end up having to repay a higher amount (in local currency terms). Using local currency removes this risk. Borrowers then have a better idea of the eventual cost of the finance.
Training in export and international trade
Export and international trade are complex areas to do business in. Developing skills and knowledge by getting some training could make a difference to your success.