Government Top-Up Scheme for Credit Insurance

From May 1st to December 31st this year UK businesses will be able to buy six months top-up insurance under the Working Capital Scheme.

Under the scheme, suppliers will be able to buy Government-backed insurance either to restore cover to the original level, or to double the amount they are able to obtain from the private sector, or £1 million, whichever is the lower. The qualifying window is going to be back-dated to include reductions of insurance cover since the 1st of April, and the Government will be consulting as to guaranteeing letters of credit.

Credit insurers Coface, Atradius , and Euler Hermes are backing the scheme and will offer it to all customers who meet their criteria.

Interestingly, Fabrice Desnos, the UK CEO of Euler Hermes stated, inter alia, that “We don’t expect the take-up for the scheme to be very high…”

Not too surprising. According to Lord Mandelson this is a transitional scheme designed to "provide a much needed breathing space for businesses suffering as a result of the reduction in trade credit insurance", but like most Government schemes it hasn't been very well advertised.

Considering the problems that the withdrawal of credit insurance already has - and will continue - to cause, one would have hoped to see a well-organised publicity campaign. As it is you can find more information on page 8 of the June issue of The Journal of the Insitute of Credit Management than practically anywhere else.