Early on Monday morning Carillion, which had been the lead contractor on Liverpool’s new £335m Royal Hospital, announced it was entering voluntary liquidation after racking up debts of £1.5bn. Tony McDonough reports

Merseyside firms caught up in the supply chain of collapsed construction giant Carillion could benefit from a £50m emergency fund set up by banking giant Lloyds.

Early on Monday morning Carillion, which had been the lead contractor on Liverpool’s new £335m Royal Hospital, announced it was entering voluntary liquidation after last-minute talks with its bankers failed to find a resolution to its £1.5bn debt mountain.

The collapse has left thousands of employees and small and medium-sized suppliers in the lurch.

Now Lloyds Banking Group (LBG) has announced a £50m package of support to its small business customers, as part of a range of emergency measures for those businesses within Carillion’s supply chain which are now in financial difficulty.

The fund will provide a range of support for customers, including waiving upfront arrangement fees on overdrafts and invoice finance facilities to existing customers; and offering capital repayment holidays on existing loans for the most severely impacted customers

It is open now and existing small business customers can apply through their usual relationship contacts, who are on hand to support businesses in need of assistance.

The fund is designed to support the working capital needs of small businesses within Carillion’s supply chain that may now be experiencing financial difficulty.

Gareth Oakley, managing director, SME Banking at LBG, said: “We know how critical it will be for businesses within Carillion’s supply chain to receive support with their cashflow, to help them through the temporary challenge to their business.

“The measures launched today will ensure these small businesses have the financial support they need to get themselves back on track.”

Bosses at the Royal Hospital insist funds are available to complete the work on the site.

Aidan Kehoe, chief executive of Liverpool Royal and Broadgreen University Hospitals, said a few days ago: “The Hospital Company is empowered to terminate existing contracts and engage a new contractor to complete construction. The Hospital Company has access to insurance funds to enable it to complete the project.”