Small firms get trade-credit lifeline
Small businesses dependent on trade-credit insurance have been thrown a lifeline by a new government pledge to stand behind such policies.


Small businesses dependent on trade-credit insurance have been thrown a lifeline by a new government pledge to stand behind such policies. Trade credit insurance protects companies against the risk that their customers go bust before paying for goods they have ordered. It plays a vital role in underpinning supply chains in a range of industries.
However, with insurers warning they face huge claims because companies in financial distress are struggling to pay their bills, there has been widespread concern that it may become prohibitively expensive to buy cover – or even that policies will no longer be available. That could make larger companies extremely reluctant to trade with smaller businesses, damaging overall growth further.
Now, however, the government has promised to set up a reinsurance arrangement with key insurers in the UK market, which will effectively mean that it is guaranteeing trade-credit insurance policies. Details of the arrangement, which follows similar initiatives launched in France and Germany, will be unveiled by the end of the month.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.
-
Rachel Reeves faces £23 billion capital gains tax “black hole” – will she be forced to look elsewhere?
The fiscal watchdog has downgraded its forecast for capital gains tax revenues, leaving chancellor Rachel Reeves with £23 billion less than previously expected
By Katie Williams Published
-
Protests erupt in Turkey after the arrest of Erdogan's rival
Turkey's president has jailed his main political opponent, Ekrem Imamoglu
By Emily Hohler Published
-
Trapped in a time of zombie government
It’s not just companies that are eking out an existence, says Max King. The state is in the twilight zone too.
By Max King Published
-
America is in deep denial over debt
The downgrade in America’s credit rating was much criticised by the US government, says Alex Rankine. But was it a long time coming?
By Alex Rankine Published
-
Bank of England raises interest rates to 5.25%
The Bank has hiked rates from 5% to 5.25%, marking the 14th increase in a row. We explain what it means for savers and homeowners - and whether more rate rises are on the horizon
By Ruth Emery Published
-
UK inflation remains at 8.7% ‒ what it means for your money
Inflation was unmoved at 8.7% in the 12 months to May. What does this ‘sticky’ rate of inflation mean for your money?
By John Fitzsimons Published
-
VICE bankruptcy: how did it happen?
Was the VICE bankruptcy inevitable? We look into how the once multibillion-dollar came crashing down.
By Jane Lewis Published
-
Would a food price cap actually work?
Analysis The government is discussing plans to cap the prices of essentials. But could this intervention do more harm than good?
By Nicole García Mérida Published
-
UK inflation slides to 8.7% - what does it mean for your money?
News Inflation has dropped below 10% for the first time in months, but with food prices at a 45-year high, is this good news and what does it mean for your money?
By Tom Higgins Published
-
Why the UK equity market is shrinking
Analysis The crisis has been building for 25 years, says Max King, and it will take decades to reverse the trend.
By Max King Published