UK Export Finance (UKEF) is the UK’s export credit agency. As a government department (formally named the Export Credits Guarantee Department) that operates under an act of parliament, we complement the private market by providing government assistance to exporters and investors, principally in the form of insurance policies and guarantees on bank loans.

Any business engaged in exporting recognises that there is a degree of risk in the process, with two primary concerns focused around getting paid and raising finance to cope with longer lead times. At UKEF we have acknowledged these concerns and have actively sought to address them. As such, in 2011 we launched several new schemes aimed at assisting exporters in accessing pre and post shipment export finance as well as insuring UK exporters against non-payment by their overseas buyers.

The first scheme for exporters to consider is our bond support scheme. Here, UKEF assists exporters in raising bonds by providing banks with a guarantee of up to 80% of the bond value. This may see the banks move away from requesting cash from the exporter to secure the facility and allow the exporter to utilise the cash in delivering the contract. We do not request a premium from the borrower and, instead, share with the banks on their interest rate margins.

The second scheme is our export working capital scheme, which has been introduced to help exporters gain access to working capital finance in respect of specific export contracts. It works in a similar way to the bond support scheme, whereby we provide the exporter’s bank with a guarantee of typically 50% of the facility amount. This scheme works very well where an exporter may win a contract higher in value than they may be used to, and again, the exporter does not have to pay an additional premium to use this scheme.

Both our bond support and export working capital schemes are accessed through the exporter’s bank.  We can only consider contracts where there is a minimum of 20% UK content.

The final scheme launched in 2011 was an update of our export insurance policy, which insures the exporter against the risk of not getting paid or not being able to recover the costs of performing a specific contract.  We can cover up to 95% of the contract value, although where the risk horizon is less than 2 years, we can only support contracts where the buyer is not in a European Union country or certain other high income countries. Exporters can access this scheme by contacting us directly or by going through a credit insurance broker.

If you would like to speak to your local UKEF representative to find out more about these schemes and other support UKEF can provide please contact Jonathan Leonard on 07818 570615 / jonathan.leonard@uktinortheast.org.uk / http://www.ukexportfinance.gov.uk .

With interest rates hitting record lows, now is the time to remortgage and save money.  By seeking financial advice and looking at home loan options, you could find a mortgage that is significantly cheaper than your existing product.

The mortgage market is beginning to flourish once more thanks largely to the Bank of England’s Funding for Lending Scheme.  This has provided mortgage lenders with greater access to credit, and subsequently, the availability of mortgages has increased significantly.  This rise in mortgage availability is not limited to one sector of the mortgage market, but several; including people looking to remortgage.

Most financial advisers are predicting the availability of low interest rate mortgages to continue for some time.  Nonetheless, as the mortgage market can change fairly quickly, most financial advisers will tell you to remortgage sooner rather than later, especially given the low interest rates available at the moment.

In addition to the low interest rates, fixed rate mortgages are also more available.  Many remortgage products have enticing fixed rate offers.  Consider the interest rates from the top ten remortgage providers for February 2013.  A quick browse through MoneySupermarket shows a spread from the highest at 3.99% while the lowest, 1.89%.  If your current mortgage interest rate is around 5%, you can see there could be a significant difference to your monthly mortgage payments.

Though the low rate tends to be fixed for a period of time before reverting in most instances to the standard variable rate, the chances are you could be paying a much higher interest rate than what’s currently available.

The downside to fixed rate mortgage deals are the fees.  They tend to be on the high side.  Of the top ten fixed rate deals, the lowest fees are £295 while the highest fees are just under £2000.  For remortgage products, the lowest fee is £4991.  Nonetheless, given the savings on switching to a low interest rate even if you pay the highest fee, you could still be saving significantly.

As you can see knowing which remortgage deal to opt for can be a difficult choice.  Do you look at the best short term option, and then look around again when the standard variable rate kicks in, or do you look at remortgaging with a long term view?

A good financial adviser will look at the whole of the market, this means that he or she will look at all the mortgage products available, take into account your circumstances, and find the most suitable remortgage deal for you.

Though everyone’s needs are different, the criterion for remortgaging often includes the following:

• The term of your current mortgage and the future term of the remortgage
• Your current repayments
• The current interest rate you are paying
• The aims of remortgaging

In addition, financial advisers will be able to give advice on a number of other issues such as the various insurances associated with your remortgage.

Author: Steven Whitehead, Tait Walker

Considering buying your first property? 2013 could a good time to do it but with so many opinions and predictions for house prices in 2013 it’s not an easy decision!

Industry leaders often point to research they have carried out into the state of the market.  Rightmove’s house price index paints an optimistic view of future house prices.  Citing the current average house price is only £2,115 less than what it was in 2008′s boom year. The research predicts that nearly half of house purchases will be part of a chain and 70% of sellers will be aged over 45.

Legal and General believe that mid 2013 will see house prices climb! Their research concludes that come 2017, house prices will climb 4.1% per year for the rest of the decade.

Reading between the lines however, it becomes clear that averages can only tell you so much.  Miles Shipside, director of Rightmove pointed out that the regional story was very different, and fluctuations in house prices could be found throughout the country.  Speaking on the boom price rises experienced in the North of England recently, Mr Shipside believed it was merely compensating for dramatic falls in property values after the credit crunch.

To buy or not to buy?

Providing you can find an affordable mortgage and raise the deposit, owning your home is still cheaper than renting it.

According to housing economist at the Halifax, Martin Ellis, the decline in house buying costs such as lower interest rates and mortgages being more affordable, has made buying a home preferable to renting.  Renting a three bedroom house costs £741 on average, whereas most mortgages will demand a monthly repayment of around £621. This equates to an extra £1,440 by renting rather than buying.

As with house prices themselves this will be subject regional variations.  Financial advisers are in the best position to advise on mortgage repayments, interest rates, and all associated factors of owning your own home.

Another factor which will affect house prices is the Bank of England’s new powers to prevent spiking.  Though this may not be the greatest news for you if you are home owner, it is however good news if you are looking to buy.  It is believed that this will trigger plenty of house sales as prices stay the same.

To discover whether it is a good time for you to jump on the property ladder and secure a mortgage, you should seek advice from qualified financial advisers.   They will be able to assess your circumstances and explain the complexities of mortgages.

To learn more about mortgages and mortgage repayments call Steven Whitehead on 0191 285 0321 or email steven.whitehead@taitwalker.co.uk

In the fifth of a series of blogs on ‘selling your business’ Tait Walker’s Corporate Finance partner, Michael Smith talks about whether remaining involved with your business post sale is a viable option.

The short answer to this question is ‘Yes, to a degree’. If the business is being sold to management it can be easier (and sometimes necessary in order to make the deal fundable) for an owner to retain a small stake in the business.  This also makes sense from the buyer’s perspective because it usually makes for a smooth transition of ownership as well as business continuity.

Sometimes buyers want to structure the deal around a series of future profit-based payments and usually would contract the vendor to remain in the business for that future period.  Such arrangements are referred to as an ‘earn out’.

However, it’s important to formalise any such agreement – even where family firms are concerned. For example, if money is left in the business, the repayment terms should be set out in a professionally drafted contract.

In a family business the exiting generation may be fairly relaxed about deferring a significant chunk of their share value, or leaving cash invested in the business. Even so, you should ensure that the appropriate tax planning implications have been taken into account.

Many of these flexible exit options have been available for some time, and a gradual transfer of ownership has been commonplace for both family succession transactions as well as management buyouts.

On a trade sale, it is usually the case that the vendors are not required to remain in the business for anything more than a few months (usually no more than six) post completion to assist with the smooth handover to the new owners.