exploreexport 2014 - finance considerations seminar
DESCRIPTION
Finance considerations presentations from the ExploreExport 2014 event on 10 November 2014 at Murrayfield Stadium in Edinburgh.TRANSCRIPT
www.scottish-enterprise.com www.scottish-enterprise.com
ExploreExport
2014
Murrayfield Stadium
Edinburgh
Monday, 10 November 2014
www.scottish-enterprise.com www.scottish-enterprise.com
Finance
Considerations
www.scottish-enterprise.com www.scottish-enterprise.com
Jon Boyce
Senior Specialist Export Finance Adviser for the
Northern Regions
UK Export Finance
Welcome & introduction
www.scottish-enterprise.com www.scottish-enterprise.com
Joanne Hills
Solutions Delivery Manager, Trade & International
Transaction Services UK
The Royal Bank of Scotland
Types of debt funding available
The route to growth Supporting your international ambitions
www.rbs.co.uk/international
Support, wherever in the world you do business
• An on-the-ground presence in over 30 countries, including 10 in Asia
• Partner banking arrangements in an additional 24 countries
Doing business internationally - Everything you need Your opportunities – our solutions
Ian Burns
International Trade Director, Global Trade and
Receivables Finance
HSBC
Types of debt funding available
Ian Burns – HSBC
International Trade Director, Global Trade and Receivables Finance
ExploreExport - Finance Considerations
Date: Monday 10 November 2014
PUBLIC
Support for International Business
PUBLIC
Ian Burns (International Trade Director, HSBC)
http://www.business.hsbc.co.uk/
https://www.knowledge.hsbc.co.uk/
https://globalconnections.hsbc.com/
• UK Trade & Investment
• Export Credit Agencies
• Chambers of Commerce
• HM Revenue & Customs
• British Business Centres
www.scottish-enterprise.com www.scottish-enterprise.com
Anne Featherstone
Investment Specialist
Scottish Investment Bank
&
Catriona McCracken
Transaction Manager
Scottish Investment Bank
Access to Equity Finance & Finance Readiness
Scottish
Investment Bank -
Overview
November 2014
Remit
• Support the development of Scotland’s private sector SME
funding market to ensure that both early stage and
established SMEs with growth and export potential have
adequate access to growth capital
Rationale
• To address specific market failures/gaps in the growth capital
market for this cohort of companies where intervention will
have a demonstrable positive impact
SIB Overview
Some of SIB’s Current Interventions:
• Financial Readiness Advice
• Suite of Equity Investment Funds
• Scottish Loan Fund
• Renewable Energy Investment Fund
• Investment into a Scottish Life Sciences Venture
Fund
SIB’s Equity Investment Funds
Partners introduce deals to SE to be
matched subject to diligence and
negotiation.
£500k - £2m £2m - £10m Scottish
Venture
Fund
Partners are vetted, the SCF will match
all qualifying investments from
registered partners subject to
eligibility.
£100 - £1m £500k - £2m Scottish
Co-investment
Fund
Targeted at early stage deals, external
investors usually required, debt and
equity options.
Up to £250k Up to
£500k+
Scottish
Seed Fund
Key Features SIB
Participation
Transaction
Size
Maximum transaction size £500k £2m £10m
SCF
Up to £1m
SVF
Up to £2m
SSF
Up to £250k
For all general
enquiries
telephone Scottish
Enterprise on
0845 687 8787
Contact Email -
For more
information about
The Scottish
Investment Bank
visit
www.scottish-
enterprise.com/sib
Scottish Enterprise can also be
followed on Twitter at
twitter.com/Scottish Enterprise
Catriona McCracken
Transaction Manager [email protected] 0141 228 2022
Anne Featherstone
Financial Readiness Manager [email protected] 0131 313 6066
Scottish Investment Bank
Scottish Enterprise
Atrium Court
50 Waterloo Street
Glasgow
G2 6HQ
www.scottish-enterprise.com www.scottish-enterprise.com
Jon Boyce
Senior Specialist Export Finance Adviser for the
Northern Regions
UK Export Finance
International Trade Finance & Export Insurance
UK Export Finance
Government Support to UK Exporters
Explore Export Event, 10th November 2014 Developing for our customers
19
Objectives
– Tell you who we are and what we do
– How we support UK exporters and how we assist
overseas buyers of UK capital goods/services
– How to contact us
20
Who we are in UK
UK Export Finance is the UK’s export credit agency
formally the Export Credits Guarantee Department
We complement the private market by providing
government assistance to UK exporters and investors, in
the form of insurance policies and also guarantees on
bank loans, performance bonds & confirmed Letters of
Credit
Provide Political Risk Insurance on overseas investments
Who we can support
Deals done range from +£25k on bank guarantees (smaller amounts considered on
export credit insurance Min premium £250, no lower limit)
Expanded remit to cover all sectors, goods & services not just capital goods and
capital services
Minimum UK content of 20%
Unconditional AA1 guarantee
21
Export insurance policy (EXIP)
Insures exporter against risk of not being paid or of not being able to recover
costs of performing export contract due to specified events
All sectors and up to 95% cover, No minimum contract value!
Can be introduced by a qualified credit insurance broker
Not for EU / rich OECD markets below 2 year risk horizon
Not whole turnover cover
It is conditional cover, so the terms of the policy must be met to have a valid
claim
Exporter completes application form and send to UKEF
22
EXIP Case Study – Flexal Springs
Company secured contract with Indian based Aerospace manufacturer however,
company concerned about their cash flow and getting paid on time
Insurance companies unwilling to take risk and provide export credit insurance. A
LOC arrangement was possible but far more expensive than export insurance
cover.
Nalin De Silva General Manager said that Flexal needed peace of mind that they
would be paid within a reasonable time frame
The EXIP policy gave the company an added degree of security
23
Contract Bond Support Scheme
Where a participating bank issues a contract bond (or indemnifies another bank
issuing the bond) for UK export contract
For advance payment, progress payment and all other performance bonds we
normally guarantee up to 80% of the bond
Exporter and Bank complete application form and submit to UKEF along with:
– Last 3 years accounts, cash flow forecast for project, Business
plan/forecast
24
Bond Support Case Study – Eduteq ltd
Secured large multi million contract in Africa that required a performance bond
however, there was insufficient security for their Bank to issue bond on their
behalf. The bond could have been cash backed however, that would have tied up
the company's working capital. UKEF provided Bank with bond guarantee
thereby reducing the banks risk and ensuring the company had sufficient cash to
deliver the contract
According to Chris Foster Operations Director, Eduteq is looking to expand
overseas sales by utilizing further UKEF support
25
Export Working Capital Scheme
We provide guarantees to banks to cover the credit risks associated with export
working capital facilities in respect of specific export contracts.
UKEF formally guarantees up to 80% of risk
Useful where a UK exporter wins an overseas contract that is higher in
value than is typical, or succeeds in winning more overseas contracts than
it has done before.
Last 3 years accounts,, cash flow forecast
Max term loan is 2 years, working capital facility to contract value is max 75%
26
Export Working Capital Case Study
UKEF’s Export Working Capital Scheme meant museum display case maker
Click Netherfield had enough working capital to sustain its contract and look for
further work overseas
The overseas contract was really good news for us. But the payment terms
agreed with the client meant that we would have had difficulty maintaining a
consistent cash flow over the period of the contract, which would have had an
impact both on this new project and on our work elsewhere.
Jim Stewart M.D
ClickNetherfield
27
Letter of Credit Guarantees
UKEF can provide 50-90% guarantee to a UK Bank on a confirmed letter of
credit The confirmed letter of credit gives exporter a double guarantee, one from
the Issuing Bank and a confirmed letter of credit from UK Confirming Bank.
With our guarantee, the UK Bank is able to confirm a letter of credit even if it
does not have the risk appetite on the foreign issuing Bank
The exporter is protected against a default of the foreign buyer and the foreign
bank
Bank makes application to UKEF
*Goods must touch UK shores!
28
Buyer/Supplier Credit, Direct Lending Facilities
UKEF provides a guarantee to Bank that makes a loan to an overseas
buyer for capital goods and/or capital services
Value of export contract on buyer credit facility is min £5M and covers capital
goods and services
Value of export contract on supplier credit facility is min £25K and covers capital
goods and services. UKEF may cover up to 85% of contract value
We can also look at providing guarantees under Bills of Exchange and
Promissory notes
Exporter makes application to UKEF
Direct Lending is where UKEF acts as a Bank and gives loan to buyer
29
TAKE YOUR BUSINESS FURTHER.
www.scottish-enterprise.com www.scottish-enterprise.com
Q & A
Panel Session
www.scottish-enterprise.com www.scottish-enterprise.com
Book an appointment with an Export Advisor to get you started.
Email: [email protected]
Telephone: 0800 0191 953
Events: http://www.scottish.enterprise.com/events
Newsletter sign-up: https://www.scottish-enterprise.com/subscribe
NEXT STEPS – TALK TO SDI
www.scottish-enterprise.com www.scottish-enterprise.com
End of seminar
Thank you!