In response to the decline in the availability of trade credit and the wider tightening in the availability of external finance, the Government – initially through the Department for Business, Innovation and Skills and subsequently through the British Business Bank – launched a Trade Credit Enterprise Finance Guarantee pilot, drawing on the structure and approach of the long-standing Enterprise Finance Guarantee intervention.
The pilot, which ran from April 2013 to September 2014, was intended to unlock credit for sole traders and small businesses falling just outside trade credit providers’ existing credit criteria, and to facilitate higher credit limits for existing customers where appropriate.
The results of the pilot show that the demand for this sort of support is not particularly high, which may be linked to a general improvement in the economy. The pilot has been evaluated and the decision has been taken not to continue it. The full evaluation documents and response are included below.