Carillion collapse: Lloyds offers affected SMEs a £50m lifeline

Lloyds Banking Group (LBG) is offering a £50m lifeline for its SME customers affected by the recent collapse of construction giant Carillion.

The eight-figure fund, open now for applications, is designed to support the working capital needs of Carillion’s small business suppliers.

Lloyds said it will provide arrangement fee-free overdrafts. For the most severely impacted customers, it will offer capital repayment holidays on loans for an initial six-month period.

The fund will also allow customers to strengthen their cashflow by extending or drawing new invoice discounting or factoring products, again without arrangement fees.

Lloyds said it will likewise offer guidance on working capital requirements.

The launch follows an announcement earlier this week, by Cabinet Office Minister David Lidington, that government support for suppliers would end before Thursday.

The managing director for SME banking at Lloyds Bank Commercial Banking, Gareth Oakley, said: “We know how critical it will be for businesses within Carillion’s supply chain to receive support with their cashflow, to help them through the temporary challenge to their business.

“The measures launched today will ensure these small businesses have the financial support they need to get themselves back on track.”

Jo Harris, managing director of business banking at Lloyds, commented: “Small businesses don’t normally have the cash reserves that larger businesses do, so any interruption to their cashflow can have a significant impact on their ability to survive.

“By supporting our small business customers during this difficult time, we hope we can help as many businesses as possible to get back on an even keel as quickly as possible.”

On Tuesday, Liverpool City Region Metro Mayor Steve Rotheram called on the Government to provide answers to the impending ripple effect of Carillion’s liquidation.

The chair of insolvency and restructuring trade body R3, Neil Harrold, urged subcontractors in the North East to seek professional advice and safeguard their futures.

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