To protect exporters from the risk of not receiving payment if clients can’t pay their debts, the U.K. is growing the purview of its export insurance policy. The country joins other nations that have offered supply chain insurance support, The New York Times reported.
A government department, UK Export Finance, has grown the program to handle transactions with the European Union, Canada, New Zealand and Iceland, among other regions. The program is intended to help firms export with confidence by providing insurance that can cover as much as 95 percent of an export contract’s value.
Beyond the U.K., Spain’s government increased the insurance offered by the CESCE export credit agency, bringing on an additional two billion euro in credit lines. Government export credit insurance plans typically offer coverage for nations where commercial trade credit insurance isn’t as readily available.
In addition, states in the European Union are providing credit insurers with guarantees to help keep firms impacted by COVID-19 on an even keel. The finance ministry in France said credit insurers had promised to eliminate or reduce coverage in exchange for a reinsurance backstop.
In separate coronavirus finance news, U.K. government officials and firms had chastised banks for requiring personal guarantees for government-backed emergency loans, per reports late last month. The requirement puts much of the risk on a firm’s owner in lieu of the institutions.
One business owner said per a past report that he asked his bank about the government coronavirus loan plan, but was presented with a different kind of offering instead. He was asked to borrow against his home and questioned the rationale of the request amid the current uncertain times. One official recommended that the owner contact the British Business Bank (BBB) to find another lender.
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