EXPORTING MADE EASY
As we approach 2026, exporter-finance risk is once again front and centre. For UK firms selling goods or services overseas, the financial landscape is evolving—and not necessarily in a cosy way. In this article we’ll explore one of the most pressing financial concerns for exporters: working-capital and payment-risk squeeze amid global and domestic pressures. We’ll update the picture for 2026, explain why it matters more than ever, what’s driving the pressure, how it shows up in real-world exporter scenarios, and what you can do to navigate it.
Why this issue matters to exporters
When you export, you aren’t simply making a sale. You’re managing a chain of events: production, shipping, delivery, handling foreign buyers, currency risk and then waiting for payment. That chain requires working capital, and if any link is stretched it puts pressure on your cash-flow, margin and ability to grow.
For UK exporters in particular, working capital is a crucial constraint: you may ship goods weeks or months before you’re paid; meanwhile you’ll incur costs, perhaps in GBP, but your revenues may arrive in foreign currency and you may have given favourable terms to the buyer. If your payment is delayed, or your costs, currency or logistics worsen, the margin can shrink quickly.
Recent data show that UK-based businesses are increasingly aware of this: more are flagging late payments, longer receivables, stretched supplier payments and weaker export growth. For example, a study by PwC shows that UK Net Working Capital (NWC) days have increased markedly since 2015, reflecting deteriorating working-capital efficiency.
In short: exporting still offers growth, but in 2026 you cannot assume the same smooth cash-flow as in more benign years. You need to plan with sharper eyes.
What’s driving the working-capital & payment-risk squeeze now.
Let’s unpack the key forces coming together as we move into 2026.
1. Longer payment terms + non-payment risk
According to the Allianz Trade “Roadmap for Success for Navigating International Trade in 2026” report, more exporters now anticipate higher non-payment risk and see payment delays increasing.
When you’re asked to provide longer payment terms to win business—and at the same time you recognise greater risk of default or delay—you’re being asked to finance the buyer. That’s a working-capital drain.
2. Rising working-capital requirement / deteriorating cash-flow metrics
PwC report: in the UK, NWC days have increased ~50% since 2015; inventory and receivables days are up, while payable days improvements have plateaued. That means UK firms are holding more capital tied up in day-to-day business—and for exporters that capital is often committed overseas or subject to cross-border friction.
3. Currency volatility & cost inflation
Costs of raw materials, logistics, shipping and freight remain unpredictable. Currency swings add extra risk when your costs are in one currency and revenues in another. The Allianz Trade survey emphasises that FX volatility and tariff/ trade-policy changes complicate the exporter’s risk equation.
4. Global trade / regulatory / market headwinds
UK exporters face sluggish home-economy growth and tougher external conditions. For example, the British Chambers of Commerce (BCC) forecast sees export growth for the UK at 3.3 % in 2026, and a continuing net-trade drag. Also, trade-finance regulation, non-tariff barriers, and supply-chain disruption all add to the risk. For instance: the UK trade-finance market for SMEs is flagged as under-served.
5. Funding/financing constraints
Access to working-capital and trade-finance remains a pinch point. SME exporters often struggle to get appropriate facilities; regulatory burdens and capital requirements on banks and finance providers add layers of cost or complexity.
How the risk plays out for export businesses.
Here are concrete ways in which the finance risk is showing up — and what to watch for.
Scenario A: Long payment terms + rising cost base
Your company quotes an export contract to a buyer overseas with payment due 90 days after shipment. You incur all production, logistics, certification costs now. Between quoting and shipment two things happen: (1) your cost for freight and materials rises, (2) currency shifts so your revenue in GBP is less favourable. You ship, wait 90 days. During that time you fund staff, inventory, storage, maybe new orders. If a payment delay hits or cost over-run occurs you absorb the pain.
Scenario B: Buyer non-payment or extended delay
You export to a new market. The buyer requests 60 days credit. Post-shipment you encounter a delay of plus 30 days before funds clear (perhaps due to their own cash-flow squeeze or currency problems). Meanwhile your costs are locked in and your next contract is waiting. You may need to top up working-capital, pay interest, borrow. Your margin is reduced and your ability to take on new orders is jeopardised.
Scenario C: Currency / cost movement after contracting
You contract in foreign currency, say USD. At contracting time USD/GBP is favourable. Before shipping your cost base (in GBP) rises and the USD weakens. When payment comes it converts to fewer pounds, your margin shrinks. Add that to rising freight or certification costs and you may end up with minimal profit or even a loss.
Scenario D: Supply-chain / logistic cost inflation + delay
You assume stable logistics cost and a 45-day delivery to your buyer. Unexpected surcharges, container delays, port congestion or certification/inspection hold up release. Your cash-flow is tied up longer, you incur extra warehousing, may need to borrow or top up costs. Payment is due only when buyer receives/accepts goods, perhaps later than expected. The net effect: more cost, delayed revenue, weaker margin.
The cost of ignoring the problem
If you do not actively manage the working-capital / payment risk equation, the consequences can be severe:
You may run out of usable working capital and be forced to turn down new orders even though demand exists.
Borrowing costs and interest begin to squeeze margins; you pay to finance your export business rather than it generating profit.
Profitability is eroded by cost inflation, currency shift and delayed payment—turning viable contracts into marginal ones.
Your reputation or reliability may suffer because delivery or payment terms don’t align with your cash-flow constraints.
Supplier relationships may strain as you delay payments or substitute cheaper suppliers, impacting quality or delivery.
Your strategic competitiveness is compromised: in tough global conditions, only firms with strong cash-flow flexibility will cope.
In short: the risk isn’t simply making a sale; the risk is executing it profitably and getting paid on time—and then being in a position to take on the next one.
What exporters should be doing now – A checklist for smarter risk management.
Given the heightened risk environment for 2026, here’s a practical checklist for exporters—especially UK firms—to manage the financial risk of exports.
1. Review & tighten payment terms
Assess the payment terms you offer overseas. Could you reduce them from 60/90 days to 30/45 days, or require partial upfront payment?
Conduct buyer due-diligence: assess credit-worthiness, payment history, market/ currency risk.
Consider using trade-finance solutions such as letters of credit (LCs), export credit insurance or buyer default insurance.
Monitor payment behaviour: track receivables ageing, don’t wait until late payment becomes a habit.
2. Ensure working-capital access & buffer
Confirm you have a committed working-capital facility or line of credit that covers worst-case payment-delay scenarios.
Map your cash-flow: list when you will incur production, logistics, certification costs; when shipment happens; when payment is expected; what happens if it’s delayed by 30/60/90 days.
Build contingency reserves or buffer in your quoting (e.g., cost margin includes working-capital cost).
Talk to your bank or finance partner now: what happens if payment is delayed? What costs will you absorb? What support is available?
3. Mitigate currency & cost risk
If you invoice in foreign currency, consider hedging (forward contracts, options) to lock in rates or reduce downside.
Alternatively, consider invoicing in GBP (if buyer will accept) or cost base match (i.e., input costs in same currency as revenue).
Frequently review your cost base: raw materials, freight, energy, certification all carry inflation/ volatility risk. Build in escalation clauses if possible.
4. Control cost base and contract pricing
Keep the cost base under continuous review. When quoting, include potential cost-inflation buffer (freight surcharges, fuel changes, customs delays).
Negotiate supplier and logistics partner terms that provide stability or predictable pricing.
Add contract escalation or surcharge clauses for major cost components (e.g., freight/energy).
Build margin to reflect risk: if you are offering longer payment terms or exporting to higher-risk markets, that cost to you must be reflected in your pricing.
5. Utilise export-finance / guarantee schemes
In the UK there are institutions such as UK Export Finance (UKEF) that offer guarantees, insurance, working-capital support. For example they support working capital loans and contract bonds.
Explore whether you can access trade-finance facilities with government-backed guarantees or export insurance to reduce your risk exposure.
If you’re an SME exporter, investigate whether you meet eligibility or whether the recently enhanced schemes for smaller contracts apply.
6. Diversify buyers, markets and supply chain
Avoid concentration risk: don’t rely on one buyer or one market where payment terms or risk are long.
Consider shorter-term or smaller-value orders initially in new markets until you build payment reliability and reduce risk.
Monitor geopolitical/trade developments in your export markets (tariff changes, currency devaluation, regulatory changes) and adjust your market strategy accordingly.
7. Enhance internal processes & contract clarity
Ensure your export contracts clearly set out: payment terms, milestone payment, penalties for late payment, delivery terms (Incoterms), currency, inspection/acceptance criteria, documentation needed.
Regularly update your cash-flow forecast to include export receivables, supplier payment obligations, logistics costs, currency exposures.
Make sure you have clear internal reporting for export pipeline, receivables ageing, working-capital tied up, buyer risk.
8. Undertake scenario/stress testing
Run what-if scenarios: e.g., if payment is delayed by 30/60/90 days, or cost increases by +10 %, or currency moves by −5 %. What happens to your cash-flow, profit margin, ability to take on next order?
Use these stress tests to decide what level of risk you can safely accept and what buffer is needed before committing.
Review periodically (e.g., quarterly) as market conditions, cost structures and currency exposures evolve.
Case Study – Exporter “Midland Engineering Co.” (UK SME)
Here’s a simplified example to illustrate how the above risks might play out, and how proactive management makes a difference.
Background:Midland Engineering Co. (MEC) is a UK SME manufacturing specialised components. They win an export order to Europe: £600,000 invoice value, payment due 90 days after shipment.
Cost base:
Production cost (materials, labour, overhead): £420,000 (paid soon after order).
Logistics/packing/shipping/customs: £50,000.
Certification/inspection/insurance: £15,000.
Total cost before margin: £485,000.
Originally quoted margin: £115,000 (≈19.2 %).
Risk factors:
Between quote and shipment (6 weeks) freight cost rose by 7% (+£3,500). Materials cost up by 4% (+£16,800). So cost base is now approx. £505,000.
The GBP weakens by 3% vs EUR (assuming revenue in euros converted to pounds) reducing real revenue in GBP equivalent by ~£18,000. So margin drops to ~£92,000.
Payment expected after 90 days; due to buyer delay actual payment arrives after 120 days. MEC uses overdraft for working-capital in meantime; interest and fees cost ~£4,000. Storage/waiting adds another £2,000. Net margin now ~£86,000 (≈14.3 %).
Because funds tied up, MEC declines a new export inquiry for £200,000 as they don’t have freed-up cash. Another order opportunity lost (opportunity cost).
If buyer actually fails to pay say 10% (i.e., payment of £540,000), the margin shrinks further; cost £505,000 + interest/overdraft ~£6,000 = £511,000 vs revenue £540,000 → profit ~£29,000 (≈5.4 %). Risk of loss emerges.
How proactive management could help MEC:
On the quote they could have built in a contingency: e.g., add £10-15k margin buffer for cost/rate risk.
Negotiate payment terms: ask for 20% on order and 50% on shipment, balance on 30 days rather than 90.
Hedge currency: fix rate so the weaker GBP risk is reduced.
Use export-credit insurance for the buyer or require LC.
Ensure working-capital facility available; calculate cash-flow for 120 days to ensure overdraft cost is acceptable.
Track cost base weekly, freight and materials; identify early cost drift and alert to buyer or negotiate surcharge clause.
Maintain supplier and logistics relationships to reduce cost volatility or negotiate fixed freight window.
Looking ahead: What to expect in 2026.
What’s ahead for exporters in the near future? Some of the key likely trends:
Interest rates & cost of finance: With inflation still above target in many cases and banks cautious, working-capital finance and overdraft costs may remain high or at least higher than the post-pandemic easing era. Exporters should assume cost of funds is not going to drop rapidly. The BCC forecasts assume the Bank rate cuts to ~3.5 % by end of 2026.
Currency and commodity volatility: Expect continued swings in currency and freight/energy costs; shocks may still arise from supply-chain disruption or geopolitical events.
Trade policy & regulatory friction: Exporters face a patchwork of tariffs, non-tariff barriers, documentation/standards complexity. The report by Allianz Trade emphasises that exporters must assume “shock plus” environment is the norm.
Greater scrutiny of exporters’ finance and compliance: As regulators and banks tighten trade-finance rules and KYC/AML frameworks, obtaining facilities may require more documentation. SME exporters should prepare. For instance, the International Chamber of Commerce (ICC) letter to UK regulators warns of trade-finance bottlenecks.
More demands on digital and efficient processes: To remain competitive, exporters must streamline logistics, documentation, contracts and finance. Delays caused by paperwork or inefficient process can translate into cost or working-capital loss.
Smaller margins, tougher terms: Since cost pressures and payment risk are higher, exporters may have to accept lower margins if they don’t build in risk adjustment. Having risk-aware pricing will be increasingly important.
Growing importance of diversification and flexibility: Because the “safe bet” export market is less safe than in the past, exporters who diversify by market, buyer and currency will be better placed.
Practical Take-aways for ExportingMadeEasy.com readers.
Here’s a summary of actionable steps you can take now:
Audit all current export contracts
Check payment terms: Are they long? Could you shorten them?
Review your cost base: Have freight/energy/materials/certification costs changed since you quoted?
Run what-if: what happens if payment is delayed by 30/60/90 days? What if costs increase by 8%? Currency moves by 5%?
Speak to your bank/finance partner right away
Confirm your working-capital facility covers export risk.
Ask: does it cover 120-day payment delays? What are the interest/fees?
Explore export-finance instruments (like guarantee schemes) — ask about eligibility and how to tap them.
Re-negotiate payment structures where possible
Ask for upfront deposit or staged payments.
Encourage earlier invoice/earlier payment terms.
Consider letters of credit, escrow or trade-credit insurance for higher-risk buyers.
Incorporate risk into pricing
If offering longer payment terms or entering frontier markets, build higher margin or risk surcharge.
Include clauses for cost escalation (freight/fuel/certification).
Consider hedging currency or invoicing in home currency if feasible.
Manage working-capital tied-up in the export chain
Maintain a heat-map of your export pipeline: order value, production start, shipment date, payment due date.
Track exposure: how much cash is tied up waiting for payment?
Consider how many days beyond payment you are financing and what it costs you.
Scour your cost base for inflation/variability
Review freight, shipping surcharges, container costs, port charges, certification delays, customs paperwork.
Negotiate with freight/logistics partners for better terms or predictable windows.
Where possible, include freight/fuel surcharges in contract or pass-through.
Monitor buyer markets and export conditions
Stay updated on trade policy changes, tariffs, sanctions, currency risk in your key markets.
Check buyer payment culture in new markets: how many days do payments average? Are there local currency controls?
Explore diversification: don’t put too much export volume into one market/buyer especially if payment terms are long.
Regularly stress-test and refine your scenario planning
Once a quarter update your scenario: payment delay, cost increase, currency move.
Use the output to decide whether to accept a contract, delay it, renegotiate or decline.
Share findings with your management team so everyone understands the cash-flow risk.
Conclusion
For exporters in the UK and beyond, the cusp of 2026 is not just about winning new buyers—it’s about securing profitable, reliably paid export business. The financial risk around working-capital, payment delays, cost inflation, currency volatility and trade/tariff disruption is higher than many assume.
Whether you’re a small UK SME or a more established exporter, the story is the same: you must treat each export contract not just as a sale but as a cash-flow event—from quotation to production, shipment to payment. Be honest about the risk, price accordingly, ensure you have access to finance, and monitor the chain.
When you export with risk awareness and financial discipline, you’re far likelier to grow sustainably rather than get caught off-guard by delays, cost shocks or margin erosion.
At ExportingMadeEasy.com, we believe exporting should drive growth—not generate stress. By proactively managing working capital, payment and financing risk, you can ensure your export ambitions are resilient and sustainable in the complex 2026-era trade environment.