Small companies in the UK are to be offered state-guaranteed loans to help their export efforts.

The Export Finance Guarantee Scheme (EFGS) will extend the range of existing export facilitation services that include support for letters of credit (L/Cs), guarantees and indemnities, export collections, bonds, trade loans and pre- and post-shipment financing.

April launch

The scheme, which is due to launch in April, is an extension of an existing £700 million domestic enterprise finance guarantee, for which companies with a turnover of up to £25 million are eligible.

The EFGS is one of a range of measures taken by the UK government to make finance available to companies that, since the credit crunch, have found it hard to find funds from purely commercial sources.

L/C support

The UK government's Export Credit Guarantee Department (ECGD) launched its L/C guarantee scheme in late 2009 (DC World News, 6 November 2009).

It was established to improve access to short-term export finance for UK exporters.

Under the scheme, EGCD provides guarantees to British banks of up to 90 per cent of the value of confirmed L/Cs issued by selected overseas banks.

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