A Teesside stainless steel firm has secured a multi-million-pound guarantee following a government guarantee.
Stainless steel alloy inventor and manufacturer Paralloy, based in Billingham, has today (September 28) announced it has secured up to £26 million following a guarantee from UK Export Finance.
It will allow the firm to access up to £26 million of a Santander UK bank guarantee facility to fuel its successful exporting business.
The company says this will enable it to create 75 new jobs and support highly-skilled employment in Teesside.
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Robert McGowan, CEO of Paralloy, said: “Getting hold of the funding to cover facilities and bonds is difficult as it ties up capital that can be used to invest in growing the company.
"UKEF General Export Facility – both this expansion and the original funding which it replaces – has been a game-changer.
“It’s a vital tool that has enabled us to fuel the growth of our export sales, increase our investments, win bigger contracts and employ more people.”
The deal replaces an initial £17m guarantee facility which was provided by Santander UK and UKEF in 2021 to support the steel company with fulfilling higher-value overseas contracts.
It says the previous facility enabled it to offer bonds on its contracts, assuring potential buyers that orders would be fulfilled even in times of market uncertainty.
The newly agreed package means that it can now issue £9 million more in bank guarantees than before.
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The company added this will allow it to pursue a greater range of high-value export contracts and enter new markets, with the funding helping the business to procure inputs whose prices have risen sharply amid global economic challenges.
Tim Reid, CEO of UKEF, said: “Working alongside Santander UK, we have increased our support for Paralloy, helping it further develop its export business and support highly skilled jobs in Teesside.
“This facility expansion shows that support which we offer through our General Export Facility is versatile and open to manufacturers in every corner of the UK who want to sell to the world.”
The company has predicted 75 new jobs will be created in Teesside by 2024 as a result of the deal.
This is UKEF’s second guarantee issued to Paralloy through its General Export Facility (GEF), the first of which helped Paralloy create more than 100 new jobs and drive export growth up by more than £30 million.
Launched by UKEF in 2021, the GEF product provides exporters with access to flexible financing.
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Now available through nine financial institutions, it has provided £325 million of support to UK exporters in 2022-23.
Mark Ling, Head of Trade Finance & Supplier Finance at Santander UK said: “We are delighted to continue supporting Paralloy’s export journey alongside the support from UKEF.
"The General Export Facility offers crucial support to UK businesses, and we are pleased to work with UKEF to provide this funding to Paralloy and a growing number of other companies to help fulfil their international growth ambitions.”
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