The FT reports that, according to government insiders, the scheme “responds to concerns that hundreds of supply chains are threatened by the recession-fuelled reduction in credit insurance, which protects companies that supply goods on credit against the risk that they will not get paid”.
David Frost, director general of the British Chambers of Commerce, comments: “Supply chains have undoubtedly been hit by the withdrawal and reduction of credit insurance facilities. If implemented, a government guarantee scheme will help to ease the difficult conditions that small and medium-sized firms are operating in.
“It is crucial that any scheme is quickly and efficiently implemented so that struggling companies can take advantage of it as soon as possible. It will be business that drives us out of recession, so supporting them through this downturn is crucial.”
The Budget will be handed down on Wednesday, 22 April.
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