Government supports small businesses through Carillion collapse
The Government has backed a £100 million support package for small businesses affected by the Carillion collapse.
The construction giant was placed into compulsory liquidation in January after suffering a series of loss-making contracts, leaving thousands of workers and subcontractors in financial purgatory.
Recent figures suggest that as many as 30,000 firms will be affected by late payments and cancelled contracts, with “17 to 18 per cent” expected to not make it through the next five years.
The loan, supported by the British Business Bank and UK Finance, is believed to be available for businesses which may not have sufficient assets as security to access conventional loans.
Business Secretary Greg Clark said: “We want to signal very clearly to small and medium sized businesses who were owed money by Carillion that they will be supported to continue trading.
“The banks have responded to my request by agreeing to support businesses and individuals affected. This further guarantee will help those businesses who may not be able to provide the usual security for a loan.
“I will continue to work closely with business organisations, trade unions and banks to actively support those affected by Carillion’s insolvency.”
British Business Bank CEO Keith Morgan added: “The Enterprise Finance Guarantee (EFG) is an important option for smaller businesses who need access to finance, but may not be able to meet a provider’s normal security requirements.
“To help in these exceptional circumstances, we have designed additional flexibility into EFG that could be particularly suitable for firms in the Carillion supply chain. We would encourage lenders to work with their customers to use these new flexibilities to meet their needs.”