News • 15.07.2020

Retailers say credit insurance plan could increase liquidity during pandemic downturn

Backstop for trade credit insurance

A business man sitting behind a piggybank with a small umbrella over it...
Source: PantherMedia/Andriy Popov

The National Retail Federation welcomed a report released this week calling for a federal backstop for trade credit insurance, saying the proposal could help provide liquidity badly needed by retailers as they recover from the recession brought on by the coronavirus pandemic.

“With retailers already ordering merchandise for the holiday season, vendors need guarantees that they’re going to be paid regardless of the volatility of the current economy,” NRF Senior Vice President for Government Relations David French said. “Trade credit insurance normally provides that guarantee, but it has become increasingly difficult to obtain. This proposal would solve that problem and help retailers make sure they have the inventory they need for a successful holiday season.”

“We support a backstop for trade credit insurance, but a swift response is essential and the congressional calendar is already strained,” French said. “While Congress considers this proposal, we have asked the Treasury Department and Federal Reserve to move forward with a short-term, federally backed loan facility that could be enacted almost overnight. Doing so would provide the immediate cash flow retailers need right now and would support a return to normal trade terms and normal business operations.”

Trade credit insurance is widely used by vendors supplying industries ranging from airlines to retailers to guarantee payment for products sold on credit, protecting $600 billion in sales each year.

Writing on behalf of insurance firms Atradius, Coface and Euler Hermes, economists Robert Litan and Yong Xu on Thursday released a 24-page report spelling out plans for a temporary federal backstop program for trade credit insurance. Major U.S.-based insurers have already cut back coverage by 14 percent since the beginning of the year, which is expected to reduce economic output by $46 billion and reduce hiring by 155,000 jobs across the economy, according to the report. The shortage of the coverage could increase as the pandemic continues, the economists said.

Source: NRF

related articles:

popular articles:

Thumbnail-Photo: Turning customers into friends - heres how it works...
24.01.2024   #marketing #online marketing

Turning customers into friends - here's how it works

WhatsApp channels as a secret weapon in the marketing mix

In fall 2023, Meta launched WhatsApp channels, a completely new feature in 150 countries ...

Thumbnail-Photo: Chinese New Year 2024: Successful marketing strategies...
31.01.2024   #e-commerce #marketing

Chinese New Year 2024: Successful marketing strategies

How online retailers can benefit from the celebrations

Chinese New Year 2024 begins on February 10 and lasts for 16 days. During the important festival, which is celebrated not only in China ...

Thumbnail-Photo: Valentines Day marketing: creative campaigns to make your heart sing...
18.01.2024   #brick and mortar retail #sustainability

Valentine's Day marketing: creative campaigns to make your heart sing

Examples of how you can score points on Valentine's Day

Zalando killed two birds with one stone in 2021: with the invitation to "campaign exchange the clothes after your ex", customers were shown ...

Thumbnail-Photo: For you: Retail marketing calendar 2024
08.01.2024   #marketing #sales promotion

For you: Retail marketing calendar 2024

You can use these phases and days for yourself and your business in the upcoming year

Birthdays, holidays, holidays ... We record all these days in calendars every year to plan our personal daily lives. But the financial year can also be planned. This can be particularly important for retailers. You can plan ...

Thumbnail-Photo: Christmas decorations: set the scene for your store!...
09.11.2023   #customer experience #shop decoration

Christmas decorations: set the scene for your store!

From the floor to the shelves and lights to the shop window - here's how to get your store ready for Christmas!

The weeks leading up to Christmas Eve are considered to be the busiest of the year....

Thumbnail-Photo: Tips: Optimal shopping experience for  Christmas...
22.11.2023   #online trading #artificial intelligence

Tips: Optimal shopping experience for Christmas

How to prepare for the shopping days as an Amazon retailer

The promotional days at the start of the Christmas...

Thumbnail-Photo: Veganuary 2024: Best sales strategies to reach the ‘no meat’...
11.01.2024   #brick and mortar retail #food retail

Veganuary 2024: Best sales strategies to reach the ‘no meat’

Why retailers should take advantage of the trend

Veganuary has begun its fourth year in Germany. Over 850 German companies are taking part in this global movement for a plant-based ...

Thumbnail-Photo: The quiet hour – A contribution to inclusion in retail?...
31.10.2023   #customer satisfaction #customer experience

The "quiet hour" – A contribution to inclusion in retail?

Finding calm in a busy world: supermarkets make their mark

The world of commerce is constantly looking for new ways to attract and retain customers...