Building funding scheme given £30m government backing

A pilot scheme to help small construction businesses get new projects off the ground has been granted £30m government backing.

The TradeUK credit scheme will make it easier for small and sole trader companies to secure more credit where previously they may have struggled.

Previously small construction businesses would only have been eligible for a maximum of £3,000 credit from Screwfix or B&Q, making it harder to take on projects due to upfront material costs.

Under the new scheme, customers of B&Q TradePoint and Screwfix will be able to apply for a credit account of up to £25,000 from the companies.

Existing trade customers will be able to apply to extend their accounts for credit of up to £50,000.

Kingfisher Group, the parent company of B&Q and Screwfix, is able to support the additional lending due to government backing.

The scheme comes from work between the government and Kingfisher to adapt the existing Enterprise Finance Guarantee scheme to widen access to funding.

The pilot allows Kingfisher to grant credit to trade businesses it would normally turn away, by sharing the risk through providing government guarantees of 75 per cent on its lending.

Ian Cheshire, Group Chief Executive of Kingfisher, 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.”

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.

He 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.”