Finance · 5 February 2018

British Business Bank offers 100m support package to firms affected by Carillion

Loans will be offered under the bank’s Enterprise Finance Guarantee programme
The British Business Bank (BBB) will provide a further 100m support package for small businesses and workers affected by the collapse of Carillion.

Through its delivery partners, which include the majority of major UK high street lenders, the development bank has said it will offer further funding to small firms that may not have enough assets as security to access traditional forms of bank lending.

The support package, which will be offered through the BBB’s Enterprise Finance Guarantee (EFG) scheme, will be of particular benefit to Carillion’s long chain of suppliers and subcontractors.

The guarantees issued to companies under the scheme can be used to support overdraft borrowing and refinancing of existing debt, the bank said.

CEO of the BBB, Keith Morgan, said: The EFG scheme 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.

The trade body UK Finance has also confirmed it will offer further support to workers affected by the Carillion collapse, providing advice on overdrafts, mortgage and credit card payments.

The new support package are in addition to the more than 200m already made in commitments from high street banks Lloyds, HSBC and RBS.
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Carillion collapse: Small firms call for project bank accounts to protect supply chains

Small businesses have urged the government to extend the use of project bank accounts for major public projects to protect firms against the risk of catastrophic market events like Carillion’s liquidation.

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Stephen Pegge, UK Finance’s managing director for commercial finance, said that it had become increasingly important to help underpin the cash flow of firms affected by Carillion’s liquidation on 15 January.


 
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ABOUT THE EXPERT

Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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