The announcement from HM Treasury on May 13 2020 to support trade credit insurance has to be very welcome news for many UK businesses and their supply chains. It is a very significant announcement because trade credit insurance plays a vital role in supply chains, oiling, as it does, the wheels of domestic and global trade.
In the UK and the world over, supply chains have been under very significant strain and distress over recent weeks, and in some cases are even broken right now, as a result of the ongoing COVID-19 pandemic. This will likely lead to increased risk of supply chain insolvencies with falling demand for some products or certain supply chain partners seeking to push out payment terms.
The further government assurance of trade credit, which complements all the other financial support packages put in place by the government over recent weeks, such as the various loan schemes and furlough arrangements, will undoubtedly help many businesses to better plan and continue to do (or recommence) business with added security and confidence as the economy re-opens/re-energizes – but without additional financial headaches and cash-flow constraints. We have prepared a client alert with more information on the announcement from HM Treasury to support trade credit insurance. Read the full client alert below:
