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Bira is calling for an extension in the government’s Trade Credit Reinsurance (TCR) scheme.
CEO of Bira, Andrew Goodacre said the removal of the scheme as planned on June 30, 2021, could “not come at a worse time for independent retailers”.
In May, the government announced the temporary TCR scheme would close at the end of this month.
The TCR was implemented as a temporary solution for companies struggling to get insurance cover for transactions due to the pandemic.
Goodacre said: “Despite the claim that there is a positive economic outlook and no need for this scheme, we have to recognise that any recovery for the so-called ‘non-essential’ retailers is very fragile. Trade credit is crucial to retail, especially with footfall still 35% below normal levels and restrictions still in place.
“Most retailers who have been closed for eight or nine months over the past year will now be submitting accounts showing losses and increased debt. The danger is that the insurers will assess this risk and reduce or even remove credit. We experienced this while the scheme was in place, and fear for the worst once the scheme is closed.”
He added: “Our research suggests that 50% of our members agree with us. When businesses are trying to rebuild their livelihoods, the last thing they need is loss of credit.”
