In a further sign of British business pitching in to limit the fallout of Carillion’s demise, Lloyds Bank today said it will make £50m available in credit to support its small business customers who are struggling as a result.
As the BBC points out, Lloyds was among the banks that stopped backing Carillion after the government refused to insure its debts.
Another lender, the Nationwide building society, has said it will take 250 maintenance and service jobs, formerly provided by Carillion, in house, and assume the contracts of a further 1,500 people.
This follows yesterday’s news that more than 90% of the Carillion staff employed on private sector contracts will continue to be paid by Carillion’s clients while its liquidation proceeds.
Lloyds’ pledge may be followed by similar moves by other banks after the UK government asked banks to help firms affected by Carillion’s collapse, the BBC reports.
It has been estimated that up to 30,000 firms in Carillion’s extended supply chains may be hit as it went into liquidation on Monday owing hundreds of millions of pounds.
Lloyds said it wanted to provide "reassurances" at an "unsettling" time.
Available now, the fund is for small businesses in Carillion’s supply chain that "may now be experiencing financial difficulty".
That could mean capital repayment holidays on loans for six months to start with, to help with cash flow problems.
The BBC asked Lloyds whether there was a contradiction in its offering help now but refusing to lend Carillion more money.
A spokesman said the banks withdrew funding from Carillion because of "viability", adding: "There are reasons the Carillion situation happened."
Image courtesy of Tomasz Bidermann/Dreamstime.com
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I continue to find the unfortunate collapse of Carillion incomprehensible. Practically all that we took precautions against in our Construction Business Management module of ENGINUITY – virtual version of real life – is exactly what is playing out, in the case of Carillion. Going into risky ventures and outright mismanagement. My Module Leader and Enginuity Co-ordinator must be genuinely alarmed at this development. I can understand, perfectly well the reason why a spokesman of one of the banks gave for withdrawing funding for Carillion – Viability. The long and short of it, is simply – Carillion was no longer a viable entity, hence to bail it out would amount to a waste. What a shame. From a construction giant to a Lilliputian!
To be honest, I find the collapse incomprehensible, as I said earlier on. For one, Carillion declared a revenue of more than £5 billion pounds sterling in 2016, only to start to go into meltdown the next year – 2017. Then liquidation in January 15th, 2018. While share price went into free fall – apologies Jeremy Corbyn – the directors and shareholders got outrageous bonuses and dividends respectively, this I find really incomprehensible, for the simple reason it defies logic and common business sense. But as I pointed out elsewhere, common sense is not always common.
With all the above, I want to humbly submit, with all sense of responsibility, all Carillion management should be subjected to a mental health assessment because I have valid reasons to question their sanity. I mean to say, in the face of all this financial ruin and calamity that they – and only they – have caused, they engineered a mechanism to continue to collect six-figure bonuses/allowances. Hmmmn, makes me recollect George Orwell’s Animal Farm. You know, all animals are equal, but some are more equal than the others! This is a classic example – that’s one of the reasons I want them to be subjected to a mental health assessment – to be carried out by Health in Construction Leadership Group, with the support of British Safety Council. That body was created for the sole purpose of situations like this.
To think a financial mess of this magnitude can take place in 21st Great Britain beats me hollow. Really flabbergasted. Then, tell me, what makes Britain great? Shouldn’t we think of substituting great with something more appropriate?
Whatever your opinions on the failure of Carillion there are thousands of small businesses out there that are caught up in this mess and need financial help to get them through it. It’s good to see Lloyds and a growing number of other companies coming forward to offer such help