Following the £1.5bn failure of Carillion on the 15th January, it is estimated up to 30,000 smaller firms may be owed money.
Many of those companies have already felt the impact, having to lay off employees and recognise there is a high probability they will not be paid for work undertaken in the weeks and months leading up to the liquidation, putting their business in jeopardy. If these companies then in turn fail, the shock effects could damage many more suppliers.
Whilst 3 banks have now stepped forward with offers to provide ‘tailored support’ of £225m to small business customers, this may be too late for some whilst others see it as just deferring lending, ultimately not resolving their situation.
Obtaining any level of payment through the Insolvency Practitioner is a lengthy process and the list of creditors is going to be extensive. With the forecast bleak, the best they can hope for is pence in the pound, at worst, nothing.
For those companies who had credit insurance cover on Carillion, they will now reap the benefit from claim payouts. These payments will lessen the impact and allow those businesses to be in a stronger position to recover and continue trading.
Contact us to find out more about how credit insurance can support your business.