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    A new Government-sponsored initiative aims to help exporters – and medium-sized businesses in particular – access the finance they need to make the most of international opportunities, with the backing of founding signatories like Lloyds Bank.


    The Government’s push to encourage UK businesses to broaden their export horizons has been boosted by a raft of financial support schemes, including a new scheme operated by the Export Credit Guarantee Department (ECGD). It’s opening doors to customers seeking funding solutions that allow long-term growth, such as Manchester-based WRG Creative Communication.

    The opening of WRG’s offices in Doha, Qatar in 2009 placed the company in the perfect position to pitch for the glittering, large-scale events that the Arab World thrives upon. In typical Middle Eastern fashion, however, the contracts for these events demand both performance and advance payment guarantees.


    Demand for guarantees

    WRG already had bonding facilities in place with the company’s UK banking partner, Lloyds Bank, when the opportunity to pitch for both the 20th World Petroleum Congress and the Arab Games arose.


    “The Bank has always been very supportive,” says WRG Finance Director, Steve Kinsey. “They provided initial finance for the start of the WRG story back in July 2006 and they’ve been alongside us for the whole journey.


    “They’ve always understood where WRG is going, so we were confident in their support.” Working alongside Lloyds Bank’s Relationship Director, Tony Buchan, Regional Trade Director
    Martin Morgan quickly realised that the extent of WRG’s ambitions, and the scope for their winning additional contracts, meant that the key to their success was allowing sufficient headroom to facilitate that growth.


    Tony Buchan, Regional Trade Director, Martin Morgan, quickly realised that the extent of WRG’s ambitions and the scope for their winning additional contracts meant that the key to their success was allowing sufficient headroom to facilitate that growth.


    “We knew from the outset that we were looking at potentially significant numbers in terms of bank guarantees. On one project alone, the guarantee demanded was around £2m,” Martin states. “What we didn’t want to happen was for us to support WRG with guarantees on the first contract they secured and then to discover that they had been awarded another two or three – at which point we would have been over-exposed.


    “It’s all about trying to think about what’s best for the customer and the future of the business and in this case we suggested bringing in ECGD to back half of our risk.”


    As one of the founding signatories of the new ECGD bond scheme, launched earlier this year as part of the Government-backed drive to boost UK exports, Lloyds Bank could immediately see the potential benefits for WRG.


    “The new scheme is a huge step forward in terms of boosting exports,” explains Martin. “It means that ECGD will support banks by guaranteeing us for up to 50% of our risk. Often contracts can be quite large in relation to the business, which can sometimes prevent businesses from pitching because the size of facilities they’d require to guarantee the deal would be prohibitive. This scheme helps to break down that prohibition by helping us to offer businesses greater funding lines.


    “What’s more, it doesn’t cost the customer any more, because the bank basically shares its earnings with ECGD.”


    Scope for further growth

     “In simple terms, the Bank’s support means that we’re able to take on more business in Qatar,” Steve confirms. “We’re comfortable in the knowledge that we have the facility to meet the requirements of those individual contracts, which combined are worth in excess of £8m to WRG.”


    Indeed, it’s delivering large-scale events like this successfully that has fuelled WRG’s growth. Turnover has increased from £8m in 2006 to £42m today, and the company now has offices in Manchester, London, New York, Doha and, most recently, Abu Dhabi.


    But it’s not just these immediate contracts that the Lloyds and ECGD funding has safeguarded. It also means that WRG have the headroom in their facilities to look at new opportunities, as Steve points out. “We’ve now opened an office in Abu Dhabi and that brings fresh opportunities, so we’re currently pitching for two large events there. When we succeed, it’s reassuring to know that we have the scope to approach Lloyds and ECGD for additional guarantees.”


    And that, concludes Martin, is why the new ECGD bond scheme has the potential to really kick-start exports and UK economic growth. “It’s about supporting our customer in the best way, helping them to achieve greater turnover and win these bigger contracts.”

9/28/2020 9:44:41 PM