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HSBC has wealth of options to support exporting businesses

HSBC is ready to help businesses which want to export, with a whole range of products and services, as Nick Missin explains.

HSBC was founded more than 150 years ago to finance trade between Asia and the West and today its global network covers 90% of international trade.

Nick Missin, head of trade, North of England and Scotland for HSBC, explains how this puts the bank in an ideal position to help businesses export.

“HSBC is a world leading international bank and we are ideally placed to assist businesses of all sizes in all locations and in all sectors with their international banking needs,’’ he says.

“On the back of that we can make introductions to our local people and we have a presence in 66 countries. That global network allows us to connect our customers to all sorts of opportunities worldwide. And it works the other way, we get regular visits from those overseas offices to the UK and to the north from the USA, from India and from China.’’

Much of that wealth of experience has gone into the bank’s Export Resource Centre, part of HSBC’s website which contains wide-ranging advice and guidance for new and established exporters.

Nick says: “It has pointers on how to trade safely and securely, which is a big theme at the moment with cybercrime and people not quite knowing who they are dealing with at the other end. There are also Brexit resources on there and links to third-party websites such as the Department for International Trade (DIT) Exporting is Great portal. It’s a hub that people can go to and click through for additional advice and detail.’’

It also provides links to HSBC’s country guides, which have been put together on all the major economies, in addition to many of the developing markets. These go into detail on the size and nature of the economies, how to do business in them and tips on business etiquette.

HSBC is also working with DIT and UK Export Finance on a Global Growth Service, designed for businesses with an annual turnover of between £5m and £50m, which are already exporters but want to expand their overseas sales.

“UK Export Finance work very closely with us on some challenging proposals,’’ he says. “They will support and guarantee finance facilities for UK exporters all around the world and in some cases they will fund the end buyer as well and we have had some real success stories with that.’’

The way in which people do business is changing rapidly all over the world and HSBC is trying to anticipate those changes.

Nick explains: “International trade has been done by people in the same way for the last 150 to 250 years, but that’s starting to change. Whether it’s evolution or revolution, the digitisation of international trade is certainly coming down the line and there will be a lot of benefits to exporters in terms of efficiency and clarity of whom they are trading with.’’

In response, HSBC is developing a number of platforms. The one which will be of most relevance to small exporters is we.trade. It’s still in pilot stage, but it’s hoped that the platform, which uses blockchain technology for open account trade transactions, will become the international trader’s platform along the same lines as Amazon or Alibaba. It’s designed specifically for small businesses.

SMEs are a particular focus for HSBC in terms of export. In September it launched its £12bn 2018 SME fund for the UK, which has increased from £10bn in 2017 and, when it was first launched in 2014, stood at £6bn. The cash, which is a lending fund for working capital, was fully used last year, hence the increase. It’s open to all UK businesses with a turnover of up to £25m.

“That is a real demonstration of our commitment to small and medium-sized businesses,’’ says Nick. “For the first time, we have ring-fenced £1bn of that fund specifically to help UK companies trade internationally and to expand overseas, so that really is targeted at the export sector. It is broken down into regions and the North has the largest fund at £2.5bn.’’

He adds: “Apart from the lending, there are free banking offers for start-ups and specific products that will help exporters from traditional documentary trade finance to general open account trading, which is what most businesses do. We offer conventional overdrafts and loans or more specific export receivable finance and that can be with or without credit protection. Certainly, within this current uncertain environment, to have your overseas debt protected, so you know you are going to get paid, is a real strength and a real reassurance to exporters, particularly if they haven’t exported to that particular market or that customer in the past. We can help guide them through that.’’

It is SMEs which are most likely to be daunted by the prospect of exporting. Is exporting getting easier or harder?

“You can argue both ways,’’ says Nick. “It is certainly easier to connect with international businesses and international opportunities. There are so many of them available out there through the internet. The actual mechanics of getting your goods abroad in many ways have not changed, there is still regulation, you need export licences and import licences and all the rest of it before you can get your goods to market. If we trade under World Trade Organisation rules that will add some bureaucracy and costs to it, but essentially it’s a lot more transparent and easier to export than it used to be.’’

And people should not be put off by media reports of volatile international politics and relationships.

“Reading the newspapers or watching the news on the TV could put people off looking overseas because of uncertainty around Brexit or the US-China trade tensions, but you never hear the good news stories that are around. There are a lot of opportunities for UK businesses to take advantage of China’s Belt and Road Initiative, for example, a huge infrastructure project with billions of dollars of investment around the world and we are seeing UK businesses taking advantage of that.

“But there are also positive relations with some established economies and markets such as Canada, Japan and Australia which are all growing. The Australian economy is booming at the moment and the advantage for UK exporters in Canada and Australia is that they speak English and culturally they are very similar, so it’s a lot easier if you’re trying to break into a market.’’

Nick points to projections from the World Bank and HSBC which say that the world is looking at an average of 3% annual growth between now and 2030.

“That’s quite a significant growth rate, particularly when you remember that that is not really coming from the advanced economies, but is mostly coming from emerging markets, particularly in the Far East. So that’s where the growth in demand is going to come from for the next 10 or 12 years and probably beyond that. This is why UK companies have really got to take advantage of those emerging opportunities and, whatever your political views are, we have got to look beyond Europe and make the most of it. There will be government and DIT support for expanding into those markets and we can help with the strength of our network in the Far East.’’

He adds: “Also, businesses which export tend to be more efficient and more profitable than those which only trade domestically. The case for exporting is overwhelming.”

Neina Sheldon
Article by Neina Sheldon
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