Your Liquidity

As companies across the UK face up to the challenge of operating in a severe downturn, shifting part of the organisation's resource to the task of developing new export markets or ramping up existing overseas trading, offers great prospects for continued growth.

Developing an exporting capability when confronted with diminishing local demand both lessens the impact of the local downturn and puts the business in a position to benefit from weaknesses in sterling relative to both the euro and US dollar.

However, at the same time a weak pound makes it easier for UK exporters to penetrate foreign markets – thanks to the fact that our goods now look much cheaper to foreign buyers – it is undoubtedly also the case that companies tend to become much more risk averse in a downturn.

Since exporting inevitably carries risk, it becomes harder to do, even as the economic conditions favour exporting as a solution to counter local pressure on margins and profit.

We can help in a number of ways, working to mitigate the risk of exporting while providing the trade financing solutions that make it possible. We are enthusiastic about understanding our customers' cross border aspirations and helping them target export opportunities.

Exporting is for organisations of all sizes, and it is a tremendous way of spreading rather than concentrating risk. Businesses that are focused solely on the UK can do little about their fixed costs as their revenues decline. Finding markets overseas for products turns this state around and uses the weak pound to generate business.

Simplifying trade

Our regionally based trade teams know that in many instances, a simple matter such as the ability to quote prices in the local currency and providing local settlement instructions can make a huge difference. This can be very challenging for a new exporter to do, but with our help it becomes simple.

Another real differentiator is the ability to provide the buyer with extended credit terms. Our global network makes it easy for us to offer credit solutions at either end of the supply chain. We can put in a structure that allows the overseas buyer to take extended credit whilst simultaneously accelerating cashflow for the seller – the kind of support that helps our customers win business.

For larger organisations with offices in multiple countries we can provide a balance netting and "sweeping" service. This type of liquidity management solution ensures that they are able to make best use of working capital and minimise unnecessary interest costs.

Financing the supply chain

UK exporters are often also importers so a key strength is our ability to help our customers finance the supply chain end-to-end. The financing need often starts several months before goods are imported and continues through a stock-holding period until they are exported and payment eventually received from the end-buyer. This kind of transactional financing, though less flexible than an overdraft, is inherently more visible and more secure. So in this difficult credit climate, the benefits of a transactional trade finance solution are even more significant.

Our online trade channels are designed to increase the speed, visibility and control of letters of credit, bonds, guarantees and collections and provide an end-to-end monitoring capability for both buyers and sellers. Whilst our award-winning global trade finance capability is supported by teams who understand local processes and markets, and who are likely already known in your chosen export marketplace.

That gives your potential clients confidence and considerably simplifies the process of buying and selling across international borders. Whether you are taking your first steps as an exporter or are already experienced at trading internationally, we can help you connect to overseas trading partners, set up new buyer and supplier relationships and find the trade finance solution that works for your business.

Talk to your relationship manager today about our trade finance solutions or contact your local International Banking Centre. For a full contact list, see www.natwest.com/international