RBS announces £75m fund as banks rally to assist impacted SMEs in Carillion’s supply chain

Royal Bank of Scotland has announced that it is offering a range of “flexible options” to support impacted small business customers in Carillion’s supply chain, providing payment holidays and assistance with their overdraft to help manage any short-term cashflow challenges in the wake of the construction and services giant’s demise.

The bank has over £75 million available to support impacted small businesses and will make more finance available if required to top up the fund.

The measures come days after Keith Cochrane, Carillion’s interim chief executive, accused the still 73% state-owned lender of taking “unilateral action which in the company’s view undermined the group’s efforts to conserve cash”.

According to a witness statement included in a document Mr Cochrane has prepared as part of the insolvency process, he said the Edinburgh-based bank restricted funding three days before Carillion went under.



RBS responded to the attack saying that it had “provided considerable support and forbearance to Carillion over many months”, arguing the “restructuring plan put forward by the company was not viable”.

Business secretary Greg Clark, economic secretary to the Treasury John Glen, and small business minister Andrew Griffiths, met banks this week to seek assurances that they will support small businesses affected by Carillion’s liquidation.

Banks represented at the meeting included Barclays, HSBC, Lloyds, RBS, Santander, Shawbrook and Aldermore. They were joined by the British Business Bank.

Between them, HSBC and Lloyds Banking Group, with the inclusion of RBS’s £75m, have now promised funds worth a combined £225m to help any small business clients affected by the liquidation of Carillion by extending overdrafts, offering repayment holidays and waiving fees.



Barclays said it had decided against setting up a fund for customers hit by Carillion’s collapse, pointing out that it had set up a helpline and saying: “Where clients are impacted we will look at increasing overdrafts, interest-only loan repayments and immediate help with cash flow on a case-by-case basis.”

In a statement RBS said: “We will also support our Commercial customers on a case-by-case basis with their individual requirements.

“We have a proactive, principles-based approach that allows us to assist our customers when there are unexpected external circumstances. This support is available to customers banking with NatWest, Royal Bank of Scotland and Ulster Bank in Northern Ireland.

“We would encourage our impacted customers to get in touch to understand the unique support and guidance that we can offer their business.”



For affected customers that borrow with RBS, the banks said it will offer:

  • a 20% increase in overdraft limit for a period of 3 months, with no additional security.
  • 3 month capital repayment holiday on all loan facilities.


  • no charge any arrangement fees on these facilities.
  • For affected customers that do not borrow with RBS, the Edinburgh-based firm said it will offer an immediate working capital facility.

    Les Matheson, CEO for Personal and Business Banking at RBS, said: “We’re committed to providing proactive support for impacted small businesses in Carillion’s supply chain. The steps we’ve taken to help ease cashflow concerns will be of immediate practical benefit and I would encourage any customers affected to get in touch to understand the unique support we can offer them.”

    Meanwhile, Nationwide Building Society has also said it would bring 250 Carillion staff in-house to allow them to continue working on a facilities management contract that had been agreed with the now-defunct construction group.

    The building society said it would also take on 1,500 staff who work for third-party suppliers related to the contract.

    HMRC has outlined the support being offered to those businesses contracted to Carillion that may be concerned about their ability to pay tax. HMRC are providing practical advice and guidance to those affected through its Business Payment Support Service (BPSS).

    The Insolvency Service has also confirmed that they have contacted all of Carillion’s private sector service customers, such as those working in facilities and management, with over 90 per cent stating they wish to continue with current arrangements. This will provide funding which enables the Official Receiver to retain the employees working on those contacts.

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