Pilot scheme gives credit to small builders

Customers of B&Q TradePoint and Screwfix, part of the Kingfisher Group, can apply for a credit account of up to £25,000. Existing trade customers will be able to apply to extend their accounts for credit from the existing £3,000 to as much as £50,000.

Kingfisher is able to support the additional lending as a result of it being backed by a government guarantee.

The pilot is the result of work between the government and Kingfisher to adapt the existing Enterprise Finance Guarantee scheme to widen access to funding and provide alternatives to bank lending.

Business minister Michael Fallon will now be writing to other companies offering them an opportunity to take part in the pilot scheme and offer their customers access to this new source of finance.

Mr Fallon said: ”Builders and tradesmen are experiencing a real bottleneck when it comes to accessing credit, and projects are being held up unnecessarily. This pilot is an innovative attempt to make a real difference for the sector.

“Britain’s builders have a vital role to play in delivering growth in this country and we’re determined to get behind them.”

Kingfisher group chief executive Ian Cheshire said: “By piloting this new scheme we are backing Britain and backing the country’s professional tradesmen. Access to credit and control of cashflow is vital for smaller tradesmen, so we are pleased that Screwfix and B&Q will be able to make it easier for more of their trade customers to get credit through this innovative new scheme. By backing Britain’s tradesmen we can boost spending on the home and help get the economy moving again.”

The Department for Business Innovation & Skills (BIS) said that the pilot enabled Kingfisher to give credit to trade businesses it would normally have to turn away, by sharing the risk through providing government guarantees of 75% on its lending. As well as allowing Kingfisher to lend to viable businesses outside its present risk profile, the scheme also allows it to lend more to existing businesses.

The pilot has been designed so there is no new administrative burden to Kingfisher. All credit decisions will be made by Kingfisher based on existing processes, and customers and frontline staff will see no difference to the trade credit application, BIS said.

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