Small construction firms are being given a financial boost under a scheme that was given a national launch in Medway.

A nine-month pilot scheme to help them secure credit has already benefited 200 firms.

Aimed initially at the trade users of the Kingfisher group of stores – Screwfix and B&Q’s Tradepoint – the scheme has so far enabled small firms to secure credit of £500,000, with more trade customers in the pipeline.

Now the scheme is available nationwide through B&Q’s TradePoint and Screwfix stores, as Business and Enterprise Minister Michael Fallon, the MP for Sevenoaks, revealed in the B&Q store in Gillingham.

He said: “Conditions in the construction industry remain challenging, but taking an innovative view of how government support schemes are deployed, such as with EFG and the work with Kingfisher, can make a real difference to the sole traders and smallest firms that struggle to access credit.

“The success of the pilot scheme is encouraging so far, and rolling it out amongst other builders merchants nationally and locally will boost confidence among our smallest traders in the construction industry.”

The pilot ensures that businesses that would have previously been turned away for credit by Kingfisher because of a lack of credit history or track record can now be helped. The risk is shared by providing Government guarantees of 75% on individual trade credit facilities.

As well as allowing Kingfisher to provide credit to viable businesses outside its present risk profile, the scheme also allows it to increase credit limits for certain existing businesses.

Ian Cheshire, group chief executive of Kingfisher plc, said: “The pilot is showing encouraging signs that trade customers of Screwfix and B&Q’s TradePoint are making good use of the extra credit available to them through the Enterprise Finance Guarantee scheme.
“Smaller business such as these will be a vital engine of economic growth for the UK so I’m pleased that we’re able to support that.”

This alternative type of finance has been made available using an extension to the Government’s Enterprise Finance Guarantee scheme. The aim of the pilot scheme is to make credit more widely available to those viable businesses in the construction industry who struggle to secure the support needed to meet the upfront cost of materials.

Guarantees will be provided to support up to £3,000 to new customers who would otherwise be denied access to a trade credit account; up to £25,000 to new customers who would otherwise have been subject to a £3,000 limit; and up to £50,000 to existing customers who are seeking a higher limit than would otherwise be available according to existing criteria.

Mr Fallon went on to visit Polypipe, a construction products manufacturer in Aylesford.

[blob] Trade credit providers wishing to participate in the pilot should contact BIS’s specialist SME finance programme management arm Capital for Enterprise Limited (CfEL).