BRITISH CHAMBERS OF COMMERCE
BRITISH CHAMBERS OF COMMERCE
EXPORTING - THE
ENGINE OF GROWTH
2015
INTERNATIONAL
TRADE
SURVEY
2015
INTERNATIONAL
TRADE
SURVEY
Responses from 2,467 businesses.
Responses
from
FINANCING
GROWTH IN UK EXPORTS
The British Chambers of Commerce (BCC) annual international trade survey
gauges UK businesses’ appetite for international trade and the opportunities
and barriers they face both domestically and internationally.
Inadequate access to Seeking out and growing new markets overseas involves upfront costs and managing
finance is holding back additional risks, especially to cashflow. A majority of the potential exporters the BCC surveyed
the UK’s export potential. say that access to finance is influential in deciding if, when, and where to export. It is therefore
worrying that of the those firms on the cusp of trading overseas nearly a quarter report
difficulty in accessing trade finance or credit assurance from lenders - products specifically
designed to support exporting firms. If UK business is to expand its presence in the global
marketplace it must be able to access the kind of financial support competitors from other
countries can take for granted.
Key findings:
● Inadequate access to finance is holding back the UK’s export potential: it can discourage
companies that are on the cusp of trading internationally; hamper investment in product
development for new markets and prevent orders from becoming sales.
● T
he results of the BCC’s international trade survey show that 60% of potential exporters agree
that access to finance is influential in deciding if, when, and where to export.
● N
early a quarter of potential exporters (24%) say they have experienced difficulty in accessing
trade finance or credit insurance from lenders.
● A
ccess to finance must be radically overhauled to support businesses through each stage
of growth, in particular for businesses on the cusp of exporting. The BCC recommends that
the government must: build a bigger, better British Business Bank and bring UK Export
Finance (UKEF) – the UK’s export credit agency - up to par with the world’s best export
finance agencies to enable more businesses to overcome the cost barriers to exporting.
John Longworth, Director General of the British Chambers of Commerce
“A fundamental revolution in our approach to exporting is needed if we are going to reverse
our historic trade deficit, overturn our current account deficit and maintain Britain’s position
as a leading global trader. We already have world-class products and services that are in
demand globally - we now need to ensure the door is open for all UK businesses wanting to
trade overseas.
“While support for UK companies to finance exports of goods and services should be
further enhanced, we also need to understand why a quarter of exporting firms surveyed
have been unable to access the finance specifically designed to help them trade overseas.
“There are huge potential rewards for firms that can access overseas markets, but there are
also costs associated in exporting. The government needs to ensure that UK Export Finance
and the British Business Bank offer world-class support to UK businesses, and remove one
of the main barriers to exporting - access to finance.
“To ensure that UK exporters have direct access to on-the-ground support in new markets,
the BCC and chamber network are playing our part by actively expanding our Global
Business Network to link British firms with customers and opportunities in the fastestgrowing economies overseas.”
BRITISH CHAMBERS OF COMMERCE
EXPORTING - THE
ENGINE OF GROWTH
2015 INTERNATIONAL TRADE SURVEY
FINANCING GROWTH IN UK EXPORTS
Lack of finance prevents businesses getting onto the export ladder
Financial resources
and access to finance
remain influential
factors for businesses
deciding if, when and
where to export.
Problems with accessing finance can affect
businesses across all sectors, but for those
looking to trade internationally, our latest
survey demonstrates that it can prevent them
from getting onto the export ladder.
Financial resources and access to finance
remain influential factors for businesses
on the cusp of exporting. Our latest survey
shows:
60%
of businesses on the cusp of
exporting cited access to
finance as an influential
factor in deciding if, when
and where to export.
Of the 60% of UK firms on the cusp of
exporting who stated that access to any
form of finance affected if, when and
where they would export to, over half
(57%) are micro firms, 29% are small
firms and 14% are medium or large firms.
Despite this,
90%
of businesses that are already exporting say further
expansion is a priority.
This indicates that confidence in economic
growth is becoming more widespread
across the country and that appetite for new
expansion is returning.
Access to finance features heavily at every
stage of a business’ export journey. The
export journey can be split into three key
stages:
i) Preparing for export: raising finance and
funding can provide a crucial launchpad
when growing a business internationally.
Exporting demands additional resources,
both in terms of financing and skilled
personnel. With the additional costs it is
essential finance is readily available for firms
on the cusp of exporting.
ii) Finding and financing market entry:
export activities entail extra upfront
expenditures, some of which are incurred
before export revenue is even realised.
Businesses that wish to export require
additional finance, for example, to research
new markets, invest in capacity and product
customisation, or to set up and maintain
foreign distribution networks.
iii) Winning contracts, financing production
and getting paid: financing exports
presents a spectrum of risk, in particular the
uncertainty over the timing of payments
between the exporter (seller) and importer
(foreign buyer). Financing exports is also
deemed more complex than financing
domestic business because:
• there are suppliers and customers
across different countries;
• transactions are in foreign currencies;
• longer lead times for the physical trade to
take place creates a gap in cash flow.
To succeed in today’s global marketplace
and win sales against foreign competitors,
exporters must be able to offer their
customers attractive sales terms supported
by appropriate payment methods. Getting
paid in full and on time is important for all
export sales.
There are huge potential rewards for
businesses that can access overseas markets,
but there are also costs associated with
exporting. Despite the rewards on offer, our
survey shows:
24%
of businesses on the
cusp of exporting
have difficulties
accessing trade
finance/credit
insurance
BRITISH CHAMBERS OF COMMERCE
EXPORTING - THE
ENGINE OF GROWTH
2015 INTERNATIONAL TRADE SURVEY
FINANCING GROWTH IN UK EXPORTS
Recommendations: A plan to boost the UK’s trade performance
Building international
networks, investing in
our export skills base
and removing barriers
to trade will support UK
businesses to take on the
world.
Too many smaller, younger, and higher-growth businesses find it hard to access the finance
they need to grow. Access to finance must be radically overhauled to support businesses
through each stage of growth, in particular for businesses on the cusp of exporting. The BCC
recommends that the government must:
● Build
a bigger, better British Business Bank that makes a real difference to business growth:
creating an institution with the capital base and direct relationship with business to address the
scale of the gap in growth finance for young, high-growth firms.
● B
ring
UK Export Finance (UKEF) – the UK’s export credit agency (formerly the Export
Credits Guarantee Department) - up to par with the world’s best export finance agencies.
Changes to UKEF must be driven by an underlying aim to match the financial support
available to companies in competitor nations – ensuring UK businesses can compete with their
competitors from other nations when seeking to win export orders.
● E
nable
more businesses to overcome the cost barriers to exporting: businesses must be
more exposed to the opportunities of global trade. The BCC and Chamber network are
building a Global Business Network. Accredited UK Chambers now work closely with overseas
British Chambers and business groups in key markets around the world, providing a seamless
connection for every business that steps through their door.
Access to finance is one of the factors holding businesses back from expanding their business
internationally. Others include: lack of export-related skills, bureaucratic obstacles to export
and patchy international business networks.
The BCC’s Business Manifesto: A Business Plan for Britain has proposed a number of
measures to assist first-time exporters, and to help existing exporters target new international
markets. Developing the UK’s export base, both through more intensive and more first-time
exporting, must be a top priority for the government.
Sukhdeep Dhillon
Global Economic Adviser
[email protected]
www.britishchambers.org.uk
www.exportbritain.org.uk
Twitter: @britishchambers @bccexport
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