A new scheme launched by the Builders Merchants Federation has been designed to provide credit to smaller companies in the building trade by enabling them to secure additional credit from their local builders merchant.
The timing of the BMF’s participation in the government’s Trade Credit Enterprise Finance Guarantee pilot scheme should enable builders to take advantage of increased refurbishment activity stemming from the second phase of the government’s Help to Buy scheme, as well as supporting those building new homes.
The government-backed pilot scheme hopes to allow potentially higher credit limits; to be offered by independent builders merchants to their customers. They have negotiated up to £50million of guarantees for a six month pilot that goes live this autumn. Additional credit terms agreed during that period can be made available for up to 9 months.
The aim of the scheme is to make credit more widely available to viable businesses in the construction industry who struggle to secure the support needed to meet the upfront cost of materials.