In response to the government’s announcement that its trade credit insurance top-up scheme, originally reported in the Budget, is to be backdated to 1 October last year, the British Retail Consortium said this was a welcome move – but it fell short of the 1 April 2008 start date the retail trade body has been campaigning for.
“The government’s decision to extend the eligibility of the trade credit insurance top-up scheme is a welcome move. But it should be backdated to last April, when insurers began removing cover as the downturn started to bite,” said Jane Milne, BRC business environment director. “Allowing businesses to nominate the six month period the top-up is available will improve the flexibility available to retailer suppliers to get help during their busiest times, such as the run-up to Christmas.”
However, access to finance remains a serious problem for businesses, although the rate of deterioration in credit conditions slowed further over the past three months, as the CBI’s latest Access to Finance Survey revealed.
Asked about the availability of new credit lines over the past three months, 20% of businesses reported that the situation had deteriorated. While this indicates that supply remains tight, conditions have eased since March (-36%) and January (-62%).
The easing of conditions for new credit supply is expected to continue. Only a net 7% of firms see a further fall in new credit supply over the next three months. Meanwhile, no further worsening is anticipated for existing credit supply.