Trade Credit Insurance Top-up Scheme Still Not Working
Commenting on the news that the £5 billion Government fund set up to help small businesses which have seen their insurance cover diminish has only been used by 72 companies, Edward Rimmer, chief executive at leading independent invoice financier Bibby Financial Services, said:
“The figures speak for themselves. Of the £5 billion earmarked to support small businesses, only £18 million has been used. This is a huge waste of funding, and the Government clearly needs to be doing more to communicate that this support is available to small and medium-sized businesses.”
The Trade Credit Insurance Top-up Scheme was launched in May to help businesses that have had their cover reduced by risk-averse insurers. However, the scheme recently revised its eligibility criteria amid criticism that it excluded a large number of businesses that weren’t seeking the minimum level of protection.
Edward Rimmer continued:
“Although the eligibility requirements have been altered to allow smaller businesses to use the fund, these measures are not enough to ensure the fund is utilised by a large number of firms. The scheme ends in December, and with the current downturn expected to last well beyond the next 12 months, unless the Government extends the scheme until the end of the first half of 2010, at the very least, then these small firms will have completely missed the boat through no fault of their own.”
“Furthermore, the scheme’s eligibility criteria contains a glaring omission – it doesn’t support businesses that have lost all of their insurance cover. Policies have been pulled en masse by insurers, and in some industries we have seen an unprecedented number of uninsured businesses who are now being forced to risk everything.”
“We welcome the Government’s attempts to support more businesses through the scheme, but the fact is, take-up remains low. And until the Government can be more transparent and to go so far as to offer even longer terms on this security then I believe this will continue to be the case.”