We’re delighted about the Government announcement earlier this month that it will back £10 billion of trade credit insurance to boost economic recovery. Our Get Britain Trading Again campaign advocated such a scheme, and now that it’s here we’re hammering out the details. But what does the latest form of Government support really mean for small businesses?

Unlike BBLS and CBILS, the trade credit insurance scheme empowers small business owners to manage their risk effectively, without taking on hefty debts that will encumber them later on when the debts need to be repaid. The Government trade credit insurance scheme means that rocketing risk levels due to the crisis will not affect your ability to insure your trade. The scheme should help to create a trading environment in which you have peace of mind and can safely grow your sales ledger.

The availability of trade credit insurance is also vital because the Government has relaxed insolvency legislation, in an effort to preserve businesses afflicted by cash flow crises. Not only are late payments and defaults more likely after lockdown, but due to the new temporary legislation, insolvencies won’t be apparent until much later than usual. By taking advantage of the Government scheme, you can make sure that your business is protected against bad debt due to customer insolvencies.  

Another benefit for small businesses of this form of Government support is the lack of any administrative headache. You simply insure your trade as usual, while the Government effectively acts as a reinsurer to manage insurers’ risk and maintain affordability. There are no barriers to accessing the scheme as with the Government loan schemes, and your business has greater control over its long term destiny. The new scheme fosters innovation and the establishment of new credit lines, both of which serve your business in the long as well as the short term.

The new trade credit insurance scheme puts small businesses in a far stronger position to benefit from the resurgence of trading activity. If you need more insurance capacity, send Nimbla a limit increase request and we’ll do everything we can to get your business the protection it needs to thrive as the lockdown lifts.

October 6, 2020