Thousands of Carillion’s suppliers are beginning to feel the impact of its collapse with subcontractors that are owed money by the contracting giant starting to lay off workers. Business East Sussex looks at the situation and the sources of help and support available affected businesses.
The recent and spectacular collapse of Carillion has really highlighted how complex the supply chain network of major businesses is in today’s corporate world.
It has also brought to the fore that in these collapses, it is usually the smaller creditors that will be most significantly affected. Initial estimates indicate unsecured creditors of Carillion will receive less than 1p for every £ that they are owed. Whilst Suzannah Nichol, CEO of UK Build, warned: “Previous collapses show that 17-18% of creditors do not survive the next five years.”
She also added: “The knock-on effect will be ricocheting right through the supply chain”
If your business is one of the, possibly as many as 30,000 creditors of the collapsed group, Business East Sussex strongly advises you firstly to take independent legal advice about your position and the process to register your interest with the Insolvency Service.
Secondly, talk to your finance providers. It will be vital to your business to keep them on your side. Be prepared for that conversation, not just how much you are owed but what that loss will mean to your cashflow over the next six to 12 months. Help them to understand what the size of your finance needs are likely to be over the coming months. They will be much more likely to work with you through this if they are confident that you understand your situation and in your ability to trade through it.
Longer term, it is important to consider what is your business strategy going to be to replace the lost income and how you can de-risk that growth to give your business as much protection as possible in the future?
The following resources have now been made available to all workers and businesses affected by Carillion’s liquidation and to those who are seeking further information:
- a webpage set up by the Insolvency Service for those affected and seeking advice;
- a dedicated website set up by the Special Managers, PWC, as well as a dedicated helpline Tel: 0800 063 9282.
- more general advice on business support is available through the BEIS Business Support Helpline Tel: 0300 456 3565 and is open Monday to Friday, 9am to 6pm. There is also a text phone service available on 0208 742 8620
If your business has been affected by the collapse of the Carillion, the Business East Sussex Growth Hub is on hand to offer free help to businesses of all sizes and in all sectors to access the support and advice they need. Our team of experienced and knowledgeable advisors will guide you to the most relevant sources of support, advice and finance across the county.
Contact 0844 4152260