How UK Export Finance is supporting ethnic minority-led businesses to achieve their global ambitions

• UK Export Finance helps ethnic minority-led businesses win, fulfill, and get paid for international business by providing guarantees, insurance and loans to support export activities. 
• This support helps ethnic minority-led businesses to access opportunities and compete on a global scale.

UK Export Finance (UKEF) is the UK government’s export credit agency. It provides loans, guarantees, and insurance to help businesses access international trading opportunities.

UKEF can help ethnic minority-led businesses through its network of regional Export Finance Managers (EFMs) based around the UK. They provide free and impartial consultations to businesses on their export finance needs.

EFMs provide access to UKEF’s range of financing options, such as export working capital and insurance. These solutions help businesses manage cash flow challenges, protect against non-payment, and ensure that they are equipped to take advantage of export opportunities. For example, UKEF’s Export Insurance Policy can protect against buyer default, giving businesses the confidence to sell internationally without the fear of losing payment.

“My primary role is to help businesses find solutions which may include signposting them to the right connections within the banking community,” Hitesh Patel, an EFM based in London, said. “It’s about connecting them to the right support to accelerate their export growth.”

EFMs also work closely with the Department for Business and Trade (DBT) which helps businesses identify potential export markets and understand the local regulations and consumer preferences that might affect their business. Once a business has an export plan in place, UK Export Finance can make it a reality by providing finance support.

“Understanding your market is key,” Alissia Deane, an EFM based in West Yorkshire, said. She emphasized the importance of businesses researching their markets and understanding if they could benefit from adapting their products and marketing to fit local demand. For instance, packaging design and product colors may need to be modified to appeal to overseas customers.

Supporting ethnic minority-led businesses to access export finance

Ethnic minority-led businesses contribute £25 billion to the UK economy per year, according to research from the Federation of Small Business. These enterprises demonstrate higher rates of innovation and are more likely to export than their counterparts — yet they face distinct challenges that can limit their potential.

According to UK Finance, the banking and financial services trade association, in 2022-23 only 56% of ethnic minority-led businesses had made a profit, as opposed to 75% of all small businesses, and 30% of ethnic minority-led businesses described themselves as “struggling,” compared to 18% of small businesses overall.

Research shows that financing gaps continue to hold back ethnic minority business growth. One report, from The British Business Bank, highlights how access to finance is a major barrier for Black entrepreneurs and the reason why 39% stop working on their business idea. Similarly, research from the London Chamber of Commerce found that minority-led businesses face difficulties in accessing funding, and receive a disproportionately low percentage of Venture Capital funding.

“One of the barriers,” Patel said, for ethnic minority-led businesses “is a lack of knowledge about who to talk to relating to exports and getting access to the right level of finance appropriate to their business.”

The disproportionate barriers to funding are where UKEF’s support becomes even more crucial for ethnic minority-led businesses. As Deane said, “raising awareness is key to reaching those underrepresented groups.”

Getting started with UKEF

For ethnic minority-led businesses looking to access UKEF’s support, the first step is to connect with an Export Finance Manager. This can be done through UKEF’s website, regional business networks, or banks. An EFM will assess the business’s finance or insurance needs and identify appropriate solutions and partners to support each business’ specific needs.

When preparing for the first meeting, businesses should bring key financial documents, such as profit and loss statements, cash flow forecasts, and information about existing export activities. This information will help the EFM understand the finance solutions that could potentially support the business.

“We’re not transaction-only,” Deane said. “I’m passionate about partnering with companies. We are here for the long haul, because as their needs change, we are still here.” EFMs stay engaged with businesses through every step of their export journey, providing regular follow-ups and ongoing support.

Making the most of the support on offer

An opportunity many businesses miss when starting their export journey is waiting too long to seek help. Often, businesses only reach out to UKEF when they’re already facing financial pressures, missing opportunities to prevent challenges early on.

“Engage with the right people early on to explore opportunities,” Patel said. “Don’t wait until it’s too late.” EFMs recommend starting the export journey by engaging with the Department for Business and Trade which will help in researching potential markets, attending international trade shows, and establishing connections with local distributors.

For ethnic minority-led businesses considering exporting, there are three essential tips to keep in mind.

• First, be confident in your product — this is crucial for success in new markets.
• Second, conduct thorough research to understand your target markets and their specific demands, ensuring your product meets the needs of international customers.
• Finally, seek expert guidance early by connecting with DBT, UKEF, and your bank’s trade finance team. This could help to avoid costly mistakes and ease the complexities of exporting.

Exporting can open new doors, helping grow and diversify your business. For ethnic minority-led businesses looking to explore new markets, UKEF and its dedicated team of EFMs are there to help you every step of the way. Patel said: “It’s about creating partnerships and ensuring that businesses are well-prepared for the journey ahead.”

Unlock global markets for your business with UK Export Finance

This article was created by Insider Studios with UKEF.