This new guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market, while the Government will work with businesses and the industry on the full details of the scheme.
Domestic firms and exporting business will be covered, with agreements planned to be in place by the end of this month (May). The scheme will be temporary and is targeted to cover challenges created by the COVID-19 outbreak.
‘Kick-start the economy’
The economic secretary to the Treasury John Glen said: “This country’s businesses are crucial in helping us to kick-start the economy as we get back to work, and I will do everything I can to help support them through this difficult time.
“By guaranteeing business-to-business transactions currently supported by Trade Credit Insurance, we will help to maintain a vital cog in our economy.”
Business minister Paul Scully hoped the guarantees would give businesses the confidence to continue trading through the crisis.
“This guarantee will be essential as we seek to reopen new sectors of the economy and get the UK back to work in a way that is safe for everyone,” he added.
Review at year’s end
Guarantees will provisionally last until the end of this year, at which time the Government will conduct a full review of the TCI market to ensure it can continue to support businesses in future. Further details will be announced in due course.
Commenting on the launch of the guarantee, Food and Drink Federation chief executive Ian Wright said: “We are delighted that the Government has introduced a guarantee scheme for Trade Credit Insurance.
“It is news that will be warmly welcomed by food and drink manufacturers of all sizes, and an intervention we have been calling on Government to introduce since lockdown first began. We look forward to working with the Treasury on the details.”
Meanwhile, food and drink businesses with £50k–£10m in unpaid invoices could soon benefit from a new £1bn funding scheme from finance provider Azzurro Associates.