Government
launches trade credit insurance 'top-up' scheme
Businesses that have experienced a reduction in their credit insurance cover are now able to purchase up to six months of top-up cover, following the launch of the Government's new trade credit insurance scheme.
The measure, which was announced in the 2009 Budget, will allow suppliers to purchase Government-backed insurance to either restore cover to its original level, or to double the amount available from the private sector up to the value of £1 million, whichever is the lower.
A maximum sum of £5 billion has been made available for the scheme.
The launch of the top-up measures follows concerns from businesses that reductions in the value of insurance cover were placing pressure on suppliers to shorten payment terms, and placing further pressure on businesses' working capital facilities.
Lord Mandelson, Business Secretary, said, 'This scheme is a targeted transitional measures 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'.
The scheme runs from 1 May until 31 December.