Small firms slate credit scheme

Phil McCabe of the Forum of Private Business has said the government’s top-up credit insurance scheme is a flop and the latest attempts to fix it won’t help, the Times reports.

McCabe said: “So far the government’s trade credit scheme has clearly been a flop. It has benefited only a handful of struggling firms and extending it in this way will not significantly improve it because the most vulnerable firms, those that have had their credit insurance withdrawn completely, remain exposed. And with late and non-payment on the rise, these firms will continue to suffer.”

Stephen Alambritis, spokesman for the Federation of Small Businesses, said: “We think that the credit insurance industry has let itself down and it should do what it is there to do. Small businesses want to deal with the credit insurers themselves rather than through some government scheme.

“This is a crucial time because the recession has bottomed out and if there are any signs of recovery in the economy then businesses will want to be able to say yes to contracts and will need credit insurance in place quickly. Credit insurance is crucial in today’s uncertain world. It has an important role to play for businesses that are trading in risky areas and taking on big contracts. It is a source of reassurance.”

Sean Purrington, regional director of Atradius, said: “As the economy improves we are starting to extend more trade credit. The taps are being turned on again. We are looking to write more cover as we move into the final quarter of this year.”