Quick guide to Supplier credit financing facility
This page is about UK Export Finance's supplier credit facility and it explains what it is, how it works, its benefits, its key features and how to apply for the facility.
What is a supplier credit?
Under a supplier credit financing facility, we provide a guarantee to a bank either:
- for a loan to an overseas buyer to finance the purchase of capital goods and/or services, worth at least £25,000 from an exporter carrying on business in the UK – known as a supplier credit loan facility; or
- to cover payments due under bills of exchange or promissory notes purchased by a bank from an exporter carrying on business in the UK, who has received them in payment for capital goods and/or services supplied to an overseas buyer worth at least £25,000 – known as a supplier credit bills and notes facility.
Finance can be made available in the main trading currencies (including sterling, US dollars and euro). Other currencies can be considered.
How does a supplier credit loan facility work?
How does a supplier credit bills and notes facility work?
What are the benefits of supplier credit financing?
The benefits are:
- the exporter is paid as soon as the goods have been shipped and/or services performed;
- the buyer or borrower has time to pay over a number of years and can borrow at fixed or floating rates;
- the bank receives a guarantee from us for the amounts due under the bills of exchange, promissory notes or the loan.
Risks covered
The bank is protected against non-payment under the guaranteed bills of exchange, promissory notes or loan. However, the bank must take the documentation risk and will therefore need to ensure that the loan agreement and/or the bills or notes is/are legally enforceable.
Eligibility
The following criteria must be met:
- the exporter must be carrying on business in the UK;
- the export contract value must be at least £25,000 or the equivalent in foreign currency;
- the bank must be acceptable to us.
Maximum amount
The maximum amount that can be made available under the facility is 85 per cent of the contract value. A minimum of 15 per cent of the contract value must be paid directly to the exporter by the buyer before the facility starts to be repaid.
We can consider support for foreign content (the cost to the exporter of purchasing goods or services from sub-contractors outside the UK) of up to 80 per cent of the contract’s value
Term
The period for payment under the facility must be at least two years.
Cost
There is no fee for the application. The premium payable for our guarantee is determined on a case by case basis.
How to apply
Contact customer services, whose details you can find on the right hand side of this page.
Disclaimer
The information available in this brochure is not intended to be a comprehensive description of our products and procedures, and many details which are relevant to particular circumstances may have been omitted.
When considering applications, our underwriters will look at each case on its merits.
The brochure was last updated in May 2010.
To download the pdf go to the Quick guide to supplier credit facility which you can find on the right hand side of this page.
Go to the supplier credit facility application form, which you can find on the right hand side of this page, to find the application form, guide for applicants on business processes and factors, guide on credit terms, guide on recourse, guide on interest rates and fixed rate export finance scheme and environmental impact questionnaire and sustainable lending questionnaire,
