Banks offer lifeline to small firms hit by Carillion collapse
Banks have agreed to offer support to sub-contractors impacted by the collapse of construction group Carillion.
Help includes offering small firms overdraft extensions, payment holidays and fee waivers.
The offer was made following government intervention, which saw Business Secretary Greg Clark, Economic Secretary to the Treasury John Glen, and Small Business Minister Andrew Griffiths, holding emergency talks with several leading banks.
The meeting was called by government to ensure small businesses exposed to the liquidation of Carillion were given the support they need.
Banks represented at the meeting were:
• Barclays
• HSBC
• Lloyds
• RBS
• Santander
• Shawbrook
• Aldermore
They were joined by the British Business Bank.
Mr Clark said: “It is essential that small businesses exposed to the Carillion insolvency are given the support they need by their lenders.
“I chaired (the) meeting to ensure that the banks are in contact with customers impacted, that they have in place the advice and support needed and that any individual cases are escalated and dealt with sympathetically, swiftly and appropriately.
“I will continue to meet with them in the days and weeks ahead to ensure these commitments are being acted on.”
Following the meeting UK Finance issued a statement setting out the actions agreed to by the banks.
Stephen Pegge, UK Finance Managing Director, Commercial Finance, said: “UK banks and the government are working closely to make sure the impact of the Carillion liquidation on SMEs 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.”
The Federation of Small Businesses said the move was welcomed.
Chairman Mike Cherry said: “The emergency measures put in place by banks for customers hit by Carillion’s collapse will provide some respite at a desperate time for hundreds of small firms. Many hundreds more are still yet to feel the knock-on impacts of the giant’s demise.
“It’s critical that they also receive support in the months ahead. We now need to establish a Carillion task force dedicated to helping all affected small firms and workers to recover and get back on their feet.”
The move came as bonus payments to Carillion directors from the date of liquidation on Monday – including severance payments to former executives – were halted by the Insolvency Service.
