Cover for businesses against bad debt
Jun 10 2009
Businesses that have had their trade credit insurance reduced since last year will receive extra help from the government.
The credit insurance scheme, which allows businesses to purchase government-backed insurance, will be extended to companies which have seen their insurance cut since October last year.
Jo Cameron, former star of The Apprentice and owner of training company High Performance Academy, says the move should be welcomed.
‘Anything that may benefit small businesses is brilliant. My cash flow has been affected as clients are taking longer to pay, so I can see how this move might help a lot of businesses.
‘However, I still think more could be done to make larger companies pay on time,’ adds Cameron.
Launched on 1 May, the scheme was previously only available to companies who had had their cover reduced since April this year. But during last month only 13 applicants received the top-up.
Richard Lambert, director general of the Confederation of British Industry, says: ‘This change gives more help to those businesses left vulnerable without sufficient trade credit insurance cover since the autumn. Restoring confidence is critical to improving the economy, and this gives companies more certainty about their ability to trade.’
However, David Frost, director general of the British Chambers of Commerce, warns that the scheme will only be effective if the government properly communicates the changes.
According to the Association of British Insurers, credit insurance claims rose by 51 per cent in the fourth quarter of last year compared with the year before.
Providers of the government scheme include HCC, Euler Hermes, Atradius and Coface.
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