Just GBP18m of the GBP5bn funds earmarked for the Government’s credit insurance scheme has been tapped by UK companies, according to recent figures. Invoice financing company Bibby has branded the scheme “a huge waste of funding” and a PR failure.
The funds on offer aim to help small businesses that have seen their insurance cover on failed business transactions diminish, but so far just 72 companies have received funds.
Edward Rimmer, chief executive at Bibby Financial Services, said: “The figures speak for themselves. Of the GBP 5 billion earmarked to support small businesses, only GBP 18 million has been used. This is a huge waste of funding, and the Government clearly needs to be doing more to communicate that this support is available to small and medium-sized businesses.”
The Trade Credit Insurance Top-up Scheme was launched in May to help businesses that have had their cover reduced by risk-averse insurers. However, the scheme recently revised its eligibility criteria amid criticism that it excluded a large number of businesses that weren’t seeking the minimum level of protection.
Edward Rimmer continued: “Although the eligibility requirements have been altered to allow smaller businesses to use the fund, these measures are not enough to ensure the fund is utilised by a large number of firms. The scheme ends in December, and with the current downturn expected to last well beyond the next 12 months, unless the Government extends the scheme until the end of the first half of 2010, at the very least, then these small firms will have completely missed the boat through no fault of their own.”
Bibby points out that the scheme’s failure to support businesses that have lost all of their insurance cover was a “glaring omission.”
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