Business Secretary Peter Mandelson today announced changes which will mean many more firms can now purchase top-up cover as part of government's trade credit insurance scheme.
Suppliers who have had their cover reduced since October 1 last year can now purchase six months top-up cover under the £5bn government scheme. Previously, only firms that had suffered reductions since April this year were eligible.
“We are acting decisively to help more businesses and allow them the breathing space to adjust their business models in response to the current climate,” said Business Secretary Lord Mandelson. CBI Director-General Richard Lambert said the move would help to restore confidence in the economy.
EEF, the manufacturers’ organisation, recently found that in a survey of over 600 manufacturers, 70% had seen credit insurance either withdrawn or reduced over the last 2 months.
“Obtaining credit insurance remains a major issue for manufacturers and today’s announcement shows government is listening to the extent of the problem and the barriers it continues to present,” said Steve Radley, EEF chief economist. “The extension of the scheme should help alleviate pressure on important supply chains and provide some confidence in securing new orders.”
In addition to the extension, the three firms providing insurance under the government scheme – Hermes, Atradius and Coface – were today joined by a fourth, HCC.
The Scheme, which runs until 31 December 2009, allows suppliers 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 £1m – whichever is the lower.
