Concern over credit insurance scheme

THE Government’s planned credit insurance scheme for small businesses will only have a limited impact, a North West-based lender claimed today.

Edward Rimmer chief executive of Liverpool-based Bibby Financial Services said he was also concerned about the length of time it has taken for the details of how the scheme will operate to emerge.

He said: “At face value, the scheme sounds like a great and extremely timely opportunity for the small business community.

“However it is tabled to run only for the next six months, and yet few will be surprised if the current downturn lasts beyond the next 12 months or more – this does little to help businesses who are expecting to trade beyond the end of 2009.

“In addition, as the minimum amount of top up cover is £20,000, but most of the bad debts we’ve seen incurred by our clients are at the smaller end of the market, few of the nation’s smaller turnover businesses will really be able to benefit.”

“While we support the Government in its attempts to bring about some liquidity and stability for small businesses, these proposals are simply not clear enough, have taken too long to be clarified and do not go far enough to help small business owners ride out the recession.”

Bibby Financial Services is part of the privately-owned Bibby Line Group.