The British Business Bank has announced that it will provide up to £100m in loans to small businesses affected by the collapse of Carillion.
The package from the government-owned bank is targeted mainly at small- and medium-sized businesses, including subcontractors of construction and outsourcing companies who may not have sufficient assets as security for conventional loans.
Subcontractors and other firms will be able to apply for government-backed loans from high street lenders.
The banking sector’s trade body, UK Finance, has also confirmed an additional multi-million-pound package for small businesses and personal banking customers.
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.”
Eddie Tuttle, CIOB associate director for policy, research and public affairs, said: “The CIOB welcomes this measure to help ease the pressure on Carillion’s supply chain. The collapse of Carillion has sent large ripples across the construction community, unsettling many from their careers and future plans.
“If any individual CIOB members are affected, support is available through our Benevolent Fund.”
Dr Kenneth Sungho Park MCIOB, senior lecturer in construction management at Aston University and a member of CM’s reader panel, said: “Small- and medium-sized contractors do the actual building works and they are heavily affected by Carillion’s collapse as they were relying on the money from them.
“SMEs should be urgently advised of this option by British Business Bank and the real action should be implemented fast enough to help cash flow issues in SMEs.”
