What a welcome sign. Only a few days ago the CBI was reporting that credit lines were still difficult to find, but conditions were starting to improve in its latest Access to Finance Survey.

And today Business Secretary Peter Mandelson – presiding over his newly enlarged empire (it’s now the BIS – or Department for Business Innovations & Skills, rather than the erstwhile BERR) – has announced that more firms can now purchase top-up cover as part of the government’s trade credit insurance scheme.

The scheme will be backdated to include suppliers who had their cover reduced since 1 October last year. Previously, the Scheme was available to companies who had cover reduced since April this year.

“This extension will give more small and medium sized businesses flexibility to respond to a reduction in their credit insurance cover. We are acting decisively to help more businesses and allow them the breathing space to adjust their business models in response to the current climate,” Lord Mandelson said on the Scheme’s announcement.

Trade credit insurance provides cover against a buyer defaulting on payment after a period of credit. It just eases financial pressures when cash flow can be agonisingly tight. And makes banks more willing to lend.

It should really help small businesses trade with more confidence.

Or, as CBI director-general, Richard Lambert said following the announcement: “Restoring confidence is critical to improving the economy, and this gives companies more certainty about their ability to trade.”

Further details of the scheme can be found on the BusinessLink website at www.businesslink.co.uk/creditinsurance.
Government responds to business needs for credit