The scheme provides essential cover to hundreds of thousands of business-to-business transactions.
The government has announced up to £10b of backing for Trade Credit Insurers.
The Trade Credit Reinsurance scheme, which has been agreed following extensive discussions with the insurance sector, will see the vast majority of Trade Credit Insurance coverage maintained across the UK.
The BTHA has been asking government to support a trade credit insurance guarantee since early in the lockdown. Natasha Crookes, director of public affairs & communications at the BTHA, said: “It is news we have been awaiting for some time and I hope it can support the toy industry to trade more effectively over the coming months.”
The guarantees will support supply chains and help businesses during the coronavirus pandemic to trade with confidence, safe in the knowledge that they will be protected if a customer defaults or delays on payment.
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 £10b 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, added: “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.”
The scheme is available on a temporary basis for nine months, backdated to 1st April 2020, and running until 31st December 2020, with the potential for extension if required.
The scheme will be followed by a joint BEIS/HMT-led review of the Trade Credit Insurance market to ensure it can continue to support businesses in future.
Eligible insurers can now apply for the Trade Credit Reinsurance scheme.