Banks are taking 'emergency measures' to support sub-contractors caught up in the collapse of construction and services giant Carillion.
Thousands of small and medium-sized firms that worked in the Wolverhampton-based group's supply chain are being offered overdraft extensions, so-called 'payment holidays' and waivers on fees to help them through the crisis in the short term.
The efforts are being co-ordinated by UK Finance, a new trade association set up in July last year and representing around 300 firms in the UK providing credit, banking, markets and payment-related services.
Stephen Pegge, managing director for commercial finance at UK Finance, said: "UK banks and the Government are working closely to make sure the impact of the Carillion liquidation on SMEs (small and medium-sized enterprises) in the supply chain is understood and managed in a way that best supports those in need of assistance.
"Lenders are contacting customers and, where appropriate, are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers to ensure those facing short-term issues can be helped to stay on track."
Also this morning Lloyds Bank announced a £50 million package of support to its small business customers, as part of a range of emergency measures for those businesses within Carillion’s supply chain which are now in financial difficulty.
The fund will be open from today and existing small business customers can apply through their usual contacts at the bank.
Gareth Oakley, managing director for SME banking, at Lloyds Bank Commercial Banking, said: “We know how critical it will be for businesses within Carillion’s supply chain to receive support with their cashflow, to help them through the temporary challenge to their business. The measures launched today will ensure these small businesses have the financial support they need to get themselves back on track.”
It followed round-table meetings held by Business Secretary Greg Clark with banks, small businesses, trade bodies and unions on Wednesday to discuss the fallout from Carillion's collapse.
The banks at the meeting included Barclays, HSBC, Lloyds, RBS, Santander, Shawbrook, Aldermore and the British Business Bank.
The aim of the meeting was to ensure small businesses exposed to the liquidation of Carillion get the support they need.
Source: Express and Star