In the Carillion mess together? Not if you're a bank, say small businesses

Small business leaders say worries are growing that banks have begun putting the squeeze on Carillion’s suppliers and tightening access to cashflow in an attempt to protect themselves from being exposed to subcontractors going bust.

Details of what specialist contractors are owed by Carillion are now emerging with some firms telling trade associations they are out of pocket by as much as £2.5m.

Rudi Klein, the chief executive of the Specialist Engineering Contractors’ Group, has said some firms are just weeks away from going under with an estimated 30,000 businesses owed more than £1bn by the failed contractor.

Now it has emerged that a number caught up in the debacle are seeing credit facilities being tightened with banks looking to ringfence their liabilities in case dozens of Carillion’s suppliers start to implode.

Klein said: “Banks are already starting to apply pressure on subcontractor firms that worked for Carillion. Banks are getting anxious and trying to find out companies’ losses.”

And Federation of Master Builders chief executive Brian Berry said he and others had already raised the issue with business secretary Greg Clark on Monday afternoon.

He said: “One of the issues is that the banks are not adopting very good behaviour. People have anecdotal evidence that the banks [are] applying pressure to small companies, making it difficult for them in terms of their financial arrangements.”

Berry said he was told Clark and small business minister Andrew Griffiths would be hauling in the banks to find out what was going on.

“Government wants to convene a meeting with the banks as soon as possible to get a better understanding and to call on them for better leniency towards construction companies,” he added.

Meanwhile, creditors are being warned they are likely to receive less than 1p in the pound, according to documents filed in court as part of the liquidation process, and liquidator PwC said it would not pay any bills “for goods/services provided before the liquidation date [on Monday]”.