Lloyds ponies up £50m 'bailout' for business clients hit by Carillion collapse

The loans in the fund will be free of arrangement fees and borrowers won't have to start repayments for up to six months

Lloyds bank has put together a £50m fund of loans for Carillion linked clients (Reuters)

You may have seen that the Government has “asked for reassurances” that banks will be willing to provide help and assistance to the businesses that have become victims of its Carillon cock up.

Translation: Business Secretary Greg Clark said something akin to “help!” when he held a meeting with industry bigwigs to discuss the situation on Wednesday.

After that meeting he said UK lenders would be prepared to offer “tailored support”. Were I running a business in Carillon’s supply chain I might be inclined to view that statement with a considerable degree of scepticism, and perhaps even concern. Seeking that tailored support” would feel to me like walking into the lions’ den with a couple of rib eye steaks attached to my arms for the purpose of whetting the appetites of the pride.

But wait, what’s this?

Here’s Lloyds Banking Group with the announcement of a £50m fund to support the Carillon linked firms among its business banking clients.

Before we go any further it’s worth noting that this is no free lunch. What has been described as a ‘fund’ is made up of loans. However, there will be no arrangement fees attached to them, and borrowers won’t have to commence repayments for up to six months. So it almost looks like this lion has gone vegan. Well, I suppose the bank’s symbol is the black horse, and they eat oats and grass and other plants.

When you consider that a lack of cashflow is one of the chief difficulties created for firms in Carillion’s supply chains it’s an initiative that might just give some of them the breathing space they need.

I’m also told that while £50m is the bank’s best estimate of how much its clients will likely need, more will be made available if that proves to be an undershoot.

An important, and welcome initiative, then? Surely. But let’s jump into the future for a moment. It’s a Monday afternoon and it has just emerged that the Bank of England has something nasty planned for the industry. A civil servant hurries into Mr Clark’s office: “Minister? Minster? We have an Antonio Horta-Osorio on the line. Shall I tell him to hold?”

“No. No. That’s the Lloyds boss. We owe him a favour. Better find out what he wants to talk about. Put him straight through, would you?”

Or am I just being a terrible, awful, cynic. Perhaps Lloyds really has decided to turn itself into one of those cuddly ponies they use at riding schools to give kids their first experience of saddling up.

Actually, it could be argued that it is Lloyds that owes the favour to the state. After all, it received £20bn in taxpayers’ funds during the financial crisis, monies that were only finally paid back last year.

The fact that it has now tabled an offer that may bailout some of the victims of that state (Carillion was to all intents and purposes an arm of the state) having itself been bailed out? There is a certain symmetry there.

So, next up RBS?