Finishes and Interiors Sector (FIS) this morning welcomed the announcement from Business Secretary Alok Sharma that Government is able to provide guarantees of up to £10 billion to Trade Credit Insurance schemes for business-to-business transactions.
Trade Credit Insurance, provides essential cover to hundreds of thousands of business-to-business transactions, will receive up to £10 billion of government guarantees, ministers announced today. Business Secretary of State Alok Sharma said:
“Trade Credit Insurance is a daily necessity for hundreds of thousands of businesses across the UK – particularly those in non-service sectors such as the manufacturing and construction sectors. Our £10 billion guarantee gives peace of mind to businesses, allowing them to continue to trade and maintaining liquidity in supply chains. This reinsurance scheme is an important step as we carefully set about firing up our economy as we emerge from the pandemic.
The Economic Secretary to the Treasury, John Glen said:
“Billions of pounds of business turnover is supported by Trade Credit Insurance each year. This reinsurance scheme will see the government and insurers working closely together to ensure that the vast majority of this cover remains in place. This means that businesses and supply chains can continue to be protected at this pivotal time as we begin to kick start the economy.”
FIS Chief Executive Iain McIlwee added:
“The guarantees will provide much needed reassurance to manufacturers and distributors and support them in extending credit to contractors in the Finishes and Interiors Sector. A key risk identified in our planning was concern that credit agreements could shorten at a time when cash is already short. Cash flow will be critical over the next few months and whilst many have opted not to or been knocked back by schemes like CBILS, the removal of lines of credit traditionally available to them would have been catastrophic. I know there has been some hard work put in to this through the Construction Leadership Council and we are grateful to our colleagues at the Construction Products Association and Builders Merchant’s Federation who have done a lot of the heavy lifting”.
Trade Credit Insurance underwrites an estimated £350 billion of economic activity of more than 630,000 businesses in the UK each year. It insures suppliers selling goods against the company they are selling to defaulting on payment, giving businesses the confidence to trade with one another.