A further package of support for the businesses and workers affected by Carillion’s liquidation has been announced by Business Secretary Greg Clark.
Through delivery partners that include all the major high street lenders, the British Business Bank will make available support of up to £100 million of lending to small businesses who may not have the security otherwise needed for conventional bank lending.
This support for these small businesses, many of whom may be sub-contractors to Carillion, will be made through the British Business Bank’s lenders using the Enterprise Finance Guarantee. These funds can be used to support overdraft borrowing and refinancing of existing debt.
This new package is in addition to the more than £200m already announced by Lloyds Banking Group, HSBC and RBS.
Any UK small business interested in EFG should, in the first instance, approach one of the 40+ EFG accredited lenders with their borrowing proposal. The Business Secretary has written to all accredited EFG lenders to draw their attention to this additional support and expects them to ensure that they are actively engaging with SMEs businesses to ensure they get the support they need.
If the EFG lender can offer finance to an applicant business on normal commercial terms, without the need to make use of EFG, they will do so. Where the small business has a sound borrowing proposal but no, or inadequate, security, the lender will consider the small business for support via EFG.
Decision-making on whether a small business is eligible for EFG is fully delegated to the lenders. These lenders range from high-street banks, to challenger banks, to asset-based lenders, through to smaller specialist local lenders.
Other sources of help
The Insolvency Service website provides information for creditors impacted by Carillion’s insolvency, including how to register as a creditor in the liquidation. The Insolvency Service have also set up a dedicated helpline. This can be found here: https://www.gov.uk/government/news/carillion-declares-insolvency-information-for-employees-creditors-and-suppliers
PwC have been appointed Special Managers to support the Official Receiver. PwC have also set up a dedicated website to provide information to those affected, including employees and suppliers. This can be found here: https://www.pwc.co.uk/services/business-recovery/administrations/carillion.html
Businesses can get more information about other options for finance at https://thebusinessfinanceguide.co.uk/journey/
If businesses are unsuccessful in applying for finance from the largest banks, they will automatically be offered a referral to one or more designated finance platforms. The lenders on these platforms may be able to offer funding if a suitable match is found.