Three banks have pledged to support small businesses affected by the recent collapse of industry services firm Carillion.

In a bid to provide assistance for SMEs impacted by the company's liquidation, Lloyds Banking Group, HSBC and RBS have launched a £50 million fund, a £100m fund and a £75m fund respectively.

The news follows a meeting held between the banks and Business Secretary Greg Clark on Wednesday, 17 January.

Welcoming the move, Mr Clark said: "I welcome this quick and positive move by banks including Lloyds, HSBC and RBS. This follows my meeting with the banks yesterday where I challenged them to see what further support they could provide for SMEs affected by Carillion's insolvency.

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"It is essential that small businesses exposed are given the support they need by their lenders, and I look forward to other banks following suit."

Also welcoming the announcement, Chief Executive of the Federation of Master Builders (FMB), Brian Berry, said the banks must show leniency towards the thousands of small businesses in Carillion's supply chain who have been affected.

"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," he said.

"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 survive 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."

(LM/MH)