Britain's government would guarantee up to $12.5 billion in trade credit insurance schemes. File photo

Britain's government provided more support to businesses hit by the coronavirus crisis, saying it would guarantee up to £10 billion ($12.5 billion) in trade credit insurance schemes which protect businesses against defaults or payment delays.

The state guarantees meant the vast majority of coverage would be maintained, the government said in a statement on Thursday.

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They were available on a temporary basis for nine months, backdated to April 1.

Business minister Alok Sharma said the announcement would allow businesses to continue to trade and maintain liquidity in their supply chains.

A woman shops for groceries at a supermarket. Picture used for illustrative purposes.

"This reinsurance scheme is an important step as we carefully set about firing up our economy as we emerge from the pandemic," he said.

Business groups welcomed the announcement.

"To help the economy get up and running again, maintaining confidence in supply chains is crucial, and we are encouraged to see this come as the product of collaboration between government and industry," Allie Renison, head of trade policy at the Institute of Directors, said.

Trade credit insurance underwrites an estimated £350 billion of economic activity of more than 630,000 businesses in Britain each year, the government said in its statement.

Reuters