Short answer
Export finance is funding that helps a business win, fulfil or grow sales overseas. It ranges from general working capital loans to trade finance tied to specific shipments, such as letters of credit and invoice finance. In the UK, the government's export credit agency, UK Export Finance (UKEF), partly guarantees lenders' facilities to exporters, which makes it easier for smaller companies to borrow.
Key facts
- Exporters often wait longer to be paid than domestic sellers
- Options: working capital loans, trade finance, invoice finance, guarantees
- UKEF supports lending through partial guarantees to banks and lenders
- The General Export Facility isn't tied to specific export contracts
Why exporters need finance
Selling overseas usually stretches cash. You may need to buy stock, hire staff or travel before you win a contract, and overseas customers often expect longer payment terms. Shipping, customs and currency add delay and risk. Export finance bridges the gap between spending and being paid.
Types of export finance
| Type | What it funds | Tied to a contract? |
|---|---|---|
| Working capital loan | Stock, staff, marketing, new markets | No |
| Trade loan | A specific order or shipment | Yes |
| Letter of credit | Guarantees payment from a buyer's bank | Yes |
| Invoice finance | Cash against unpaid export invoices | Yes, per invoice |
| Bonds and guarantees | Performance or advance payment bonds a buyer requires | Yes |
How UK Export Finance helps
UKEF is the UK government's export credit agency. Its General Export Facility gives participating banks and lenders a partial guarantee on facilities to exporters: if the exporter doesn't repay, UKEF covers part of the lender's loss. That lets lenders support companies they might otherwise turn down. The exporter is still fully responsible for repaying. See what is UKEF and how UKEF-backed loans work.
Who qualifies for UKEF support?
Under the General Export Facility, a business generally needs at least 20% of annual turnover from UK export sales in any one of the last three financial years, or at least 5% in each of the last three. It also needs UK premises and employees, and goods or services produced in the UK.
How to choose
- For broad growth (stock, staff, new markets), a working capital loan is more flexible.
- For a single large order, trade finance tied to that order may be cheaper.
- If buyers pay slowly, invoice finance or better payment terms may help.
Guides in this section
How Nighthawk does it
Nighthawk is listed on GOV.UK as a participating lender in UKEF's General Export Facility. We lend £150,000–£500,000 over 12–18 months as general working capital, not tied to specific export contracts.
FAQs
Does export finance need an export contract?
Not always. General working capital facilities under UKEF's General Export Facility don't require you to evidence individual contracts.
Is UKEF a lender?
UKEF mostly supports lending by guaranteeing banks' and lenders' facilities, though it also offers some direct products.
Can a small business get export finance?
Yes. UKEF's General Export Facility is aimed at helping smaller exporters access finance through participating lenders.
Does the UKEF guarantee protect me?
No. It protects the lender. You remain responsible for repaying in full.