Insight Associates provide outsourced accounting and Finance Director services to ambitious and growing businesses. We work as your only resource or with existing staff to give you complete financial support including monthly management accounts, high level financial advice, robust controls and financial systems, funding and business planning, payroll & compliance, VAT returns and statutory compliance.

Successful business leaders have all the information they need to make good decisions…Do You?

Tuesday, April 28, 2009

Trade Credit Insurance

In my last entry I mentioned the lack of apparent detail with the latest Government initiative - Trade Credit Insurance.

Another search has revealed a page on the Business Link website which definitely helps, including a document to download.

A study of this, and looking at the situations that we are facing with our clients, it would appear that some of the recent sceptical commentary on this scheme is correct - I really cannot see it having much effect.

The impact of the wholesale withdrawal or reduction of credit limits by the main credit insurers in recent months cannot be overstated. It is dramatic. Yet it has not really reached the headlines in the same way as many other facets of our current economic predicament have. At the very time that businesses need the support and comfort of the knowledge that should one of their customers fail then they will not be hurt, the insurers are reducing cover due to the increased risk! It simply makes no sense.

Two of our clients are facing difficulties because of the actions of credit insurers. Neither of which in our view is fair nor reasonable. The issue is exacerbated by the fact that the insurance is a precondition of funding, so the impact is not just increased risk but reduced cash! The intervention by the Government with its "top-up" scheme is it now seems very restricted and will only give any help at all in the narrowest of circumstances, and not for the very businesses I suspect they think they are helping!

Monday, April 27, 2009


Uninspired? Yes, that is probably how I feel about Alastair Darlings Budget last week. There was very little of note there for businesses (that we did not already know about) and certainly as I see it not that much that was going to make a real difference.

Without wishing to make any political comment (no time for that stuff!) it does seem that this Government really does not understand what businesses need (especially smaller ones) to help them through this period. The one thing of note that is of interest though is the new top up Trade Credit Insurance scheme - but unless I am missing something, yet again there seems to be very little details available as to how this will work. Having clients that have been very negatively impacted by the virtual closure of the credit insurance market, this could be of some help - if only we could understand how!!

One very interesting part of the complete budget report published by HM Treasury though, was information about how the Business Payment Support Service has been operating. This is the one thing that the Government has done so far that has really had a great impact. In effect this is giving short-term overdrafts to businesses without the need for bags of bureaucracy. A brilliant move. According to the HM Treasury Budget Report up to 19 April 2009 100,000 businesses had used this service and £2 billion of tax had been deferred through payment plans. With interest rates at only 2.5% now this is certainly worth looking at.

I wish we could say the same for all the other schemes that have been dreamt up - most of which seem to be having very little impact so far.

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