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Real Help Schemes: Update

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During the Pre-Budget Report, the Chancellor provided an update on a number Real Help Schemes managed by the Department for Business Innovation & Skills, which were set up to help businesses during the economic downturn.

Trade Credit Insurance

The Trade Credit Insurance Top-up Scheme was introduced on 1 May 2009 to provide support to businesses that saw their whole-turnover trade credit insurance cover reduced by their provider.  The scheme enables businesses to top-up their cover for a maximum of six months at a price of 1% of the value of the cover.

The value of cover is determined by the level of cover provided by the underlying credit insurance policy, up to a maximum of £2 million.

Businesses have responded well to the scheme over the past year, adapting to the changing level of trade credit insurance and are now actively managing their credit risks and reducing their dependence on trade credit insurance.  As of 4 December, 105 applications have been accepted to the value of £18.5 million.

This Chancellor announced yesterday the scheme will close to new applications at the end of the year as planned.

Business Payment Support Service (Time to Pay)

Since the 2008 Pre-Budget Report, HM Revenue & Customs has reached agreements with 160,000 businesses employing hundreds of thousands of people to defer more than £4 billion in businesses taxes (including corporation tax, , and PAYE).  This is being continued.

Capital for Enterprise Fund

The Capital for Enterprise Fund is a £75 million investment fund (£50 million from Government augmented by £25 million from the banks - Barclays, HSBC, Lloyds and RBS) to support viable business with equity or mezzanine investment, up to £2 million.

To date fund managers have made offers totalling £69.9 million to 45 businesses, of which 28 offers have been accepted to the tune of nearly £44.5 million. Of these, twelve businesses have received investment totalling £17.75m.

The fund is open to all UK domiciled small and medium sized enterprises with an annual turnover up to Ä50 million and/or annual business balance sheet total not exceeding Ä43 million, and less than 250 employees.

Working Capital Scheme

The Working Capital Scheme is a facility to provide banks with guarantees covering 50% of the risk on working capital portfolios worth up to £20 billion.

Guarantees totalling over £2 billion have now been provided through the scheme and, as similar Government support is now available through the much broader Asset Protection Scheme, there will be no further guarantees offered under the Working Capital Scheme.

Prompt Payment

UK payment times for October 2009 as reported by Experian are the shortest since April 2008, with 19 out of 20 invoices paid by central government within 10 days.  There are also now more than 700 signatories to the .

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