Leeds and Manchester-based alternative finance provider, Reward Finance Group, has pledged financial support to help Carillion suppliers whose businesses may be put under threat due problems caused by the construction giant’s collapse.
Cabinet office minister, David Lidington, has warned that those companies who have been subcontracted to work on private sector deals will have government support withdrawn. This could affect up to 30,000 firms which are owed money by Carillion.
According to the head of the Federation of Small Businesses, Mike Cherry, Carillion had already extended its payment terms to 120 days and, now that it has gone bust, its creditors will be “at the back of the queue for payment”.
Director of Reward Finance, Nick Smith said: “Many of Carillion’s suppliers will be having sleepless nights following this week’s announcement and will be drawing up survival plans to protect the company and employees.
“Most would not have expected or planned for a bad debt from an organisation such as Carillion, which would have been seen as rock solid especially as it had so many high-profile Government contracts.
“Although it will have a huge impact on cash flow there may be an opportunity for some firms to trade through with an injection of short term capital. However with high street banks taking an age to actually make funds available, this may not be s,een as a viable option.
“Reward’s specialism is to provide funding to trading businesses in timescales that banks are incapable of achieving. We have pledged therefore to do all we can to help those companies affected by the collapse which can demonstrate that, with the help of short term finance, they can trade through this extremely difficult period.
“With a recent investment of an additional £40m worth of funds, Reward are keen to help businesses stabilise themselves as well as grow.”