Shipbuilding Credit Guarantee Scheme
Find out about the Department for Business and Trade’s Shipbuilding Credit Guarantee Scheme: its benefits, eligibility criteria and how to apply.
The Department of Business and Trade (DBT) Shipbuilding Credit Guarantee Scheme, to be delivered by UK Export Finance (UKEF), provides a partial guarantee to a lender making a loan to a ship-buyer or operator, so that new vessels, or refits, retrofits or repairs of existing vessels can be procured from UK shipyards.
This facility enables the shipyard to receive payment as though it was a cash contract, while the buyer can access extended repayment terms.
The loan is typically repaid over a period of 2 years or longer by the borrower, while the shipyard receives payment via the credit facility as amounts fall due under the commercial contract.
DBT can provide partial guarantees covering up to 80% of the risk to lenders for a maximum repayment period of up to 12 years.
Benefits
The benefits of the Shipbuilding Credit Guarantee Scheme include:
- the shipyard is paid as though it has a cash contract
- the buyer or borrower has time to pay over a number of years and can borrow at fixed or floating rates
- the lender is protected against non-payment, for whatever reasons, of the instalments of principal and interest due under the guaranteed loan.
Eligibility criteria
The transaction must satisfy DBT’s eligibility criteria, which includes the requirements that:
- the shipyard must be carrying on business in the UK
- the bank making the loan must be acceptable
- the underlying financials and contractual structure are acceptable
All transactions supported by DBT must satisfy our:
- · anti-bribery and corruption policy
- · environmental, social and human rights due diligence processes
Cost
The premium payable for DBT’s cover is determined on a case-by-case basis, with it normally taken from the loan interest and paid by the lender(s).
How to apply
To find out more about a DBT Shipbuilding Credit Guarantee or to discuss eligibility for support, contact our customer services team.
Contact [email protected] or call +44 (0)20 7271 8010.
Application process
To access the Shipbuilding Credit Guarantee Scheme, companies should discuss their potential application with their lender.
More information
- Read our guide for applicants on business processes and factors, to find out how we make decisions on applications
- Read our position on Financial Crime Compliance