The British Business Bank has come up with a support package including loans worth a total of £100M to hlep small businesses hit by Carillion’s demise.
The loans will be distributed via high street lenders, and they will go to small business hit by Carillion’s collapse who might not have the assets to get a conventional loan. The banks are also supporting the businesses through personal banking support, for example if the crisis has a knock on affect in areas such as overdraft, mortgage or credit card repayments.
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 chief executive 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.”
This is in addition to the £200M lending packages announced by Lloyds, HSBC and RBS.