Firms suffering from a reduction in credit insurance will from today be able to purchase up to six months top-up cover as part of the Government’s trade credit insurance scheme, announced in last week’s Budget.
Under the scheme, which goes live today and runs until December 31, suppliers will be able to purchase Government-backed insurance to either restore cover to the original level or double the amount they are able to obtain from the private sector up to the value of £1 million (whichever is the lower).
Companies from all sectors and from all stages of the UK supply chain, which have suffered from a reduction in cover from April 1 this year, will benefit from the increased certainty that this scheme gives – providing real and targeted help for British businesses.
The scheme was established in response to growing concern from businesses that reductions in the value of insurance cover create pressure on suppliers to shorten payment terms, and can place additional pressure on businesses’ working capital facilities.
Business Secretary Lord Mandelson said: “The Government’s Trade Credit Insurance top-up scheme provides a lifeline for businesses to help them address the specific challenges that they are facing as a result of the reduction in trade credit insurance.
“This scheme is a targeted transitional measure to help companies secure the cash flow they need and restore confidence throughout supply chains. Risk is shared between Government and the private sector striking the right balance between supporting businesses and protecting taxpayers’ money.”
A maximum of £5 billion of top-up cover for trade credit insurance will be available through the scheme, which is part of the Real Help package and will be delivered through the Working Capital Scheme.
To apply or for further information companies should contact their trade credit insurer. Further information is also available through Business Link.