UK banks and the Government are working closely to make sure the impact of the Carillion liquidation on SMEs in the supply chain is understood and managed in a way that best supports those in need of assistance.

The assurance has come from UK Finance and Stephen Pegge, UK Finance Managing Director, Commercial Finance, has said that lenders are contacting customers and, where appropriate, are putting in place emergency measures.

These will include “overdraft extensions, payment holidays and fee waivers to ensure those facing short term issues can be helped to stay on track,” he explained.

Banks must show leniency to the thousands of SMEs in Carillion’s supply chain, according to the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, said: “It’s absolutely critical that the banks give the innocent victims in Carillion’s supply chain as much leeway as possible in the short to medium term. We therefore welcome UK Finance’s announcement late this afternoon that lenders are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers, to ensure those facing issues relating to Carillion’s liquidation can stay on track. Leniency from the major banks will make all the difference to the thousands of firms in Carillion’s supply chain as to whether they survive its collapse, or follow suit. The construction industry is the cornerstone of the UK economy so it’s in all of our interests to do what we can to support these small companies and limit the domino effect that Carillion’s demise could have.”