A comprehensive range of facilities is now available to the UK exporter for the finance of export credit. Earlier measures to stimulate exports by improving the facilities available to finance them had concentrated on capital goods, for which long credit terms are increasingly demanded by overseas buyers; and these facilities have been further improved in the last year, as is described later in this note. But little had been done until recently to encourage those exporters who sell on short-term credit; yet something like one-quarter of all UK exports are sold on credit terms of up to six months. Admittedly, the cost of finance for such a short period is a far less important element in the final price of the goods-except where margins are very narrow-than it is in the case of long-term credit. Nevertheless, it is in general unsatisfactory that, when short-term rates are high, the facilities for financing exports should produce a rate structure which is more favourable to longer-term credit. This disparity has now been reduced by a new scheme, first mentioned by the Chancellor of the Exchequer in July last year. Details have been worked out with the banks, and were announced by the President of the Board of Trade on 8th March.
Improvements in export finance