Budget 2009 and the Credit Insurance implications
Following the Budget announcement yesterday afternoon, Edward Rimmer, chief executive of Bibby Financial Services in the UK & Ireland, has issued the following statement:
"The measures announced in today’s Budget should go some way to giving small and medium-sized businesses in the UK financial respite during what Darling has described as ‘the most serious global economic turmoil for over 60 years’.
"While Darling’s measures seek to ease the burden of ongoing cashflow problems for the UK business community – something we know to be a primary concern from our own market research – the issue of late payment was not addressed and remains a major concern for struggling businesses across the country.
"The existing credit insurance scheme which the Government has pledged to assist, will certainly benefit businesses. However, as claims in the credit insurance market last year reached record levels, there is a danger that these claims will exceed premiums paid, leaving insurers in a vulnerable position. Should this trend continue through 2009, the Government could well have another black hole on their hands which has to be filled by the taxpayer.
"As with any Government intervention for small and medium-sized businesses, Darling needs to ensure these measures are more easily accessible and understandable. Otherwise, as with many other initiatives to date, there will be considerable confusion and most importantly a barrier to access for SMEs. The feedback we receive from the small and medium-sized businesses we work with, is that they have a basic awareness of such initiatives but no idea how to go about getting benefit, and therefore don’t bother."