Construction company bosses pump £584m into their own firms to keep them afloat
PUBLISHED: 08:29 03 April 2018 | UPDATED: 11:19 03 April 2018
The amount of money loaned by construction company directors to their own businesses to support them has risen by a third in the past year, new figures show.
An analysis of information from 180,000 firms shows almost £584m was loaned last year – up from £408m in the previous 12 months.
The study said there were fears that smaller construction business owners, who represent the vast majority of these loans, may be forced to further increase lending following the collapse of Carillion and subsequent disruption in the industry.
Many businesses that were subcontractors for Carillion will not be paid for their work, increasing the likelihood of those businesses’ directors having to cover cashflow shortages, it was suggested.
Conrad Ford, founder of business finance firm Funding Options, which conducted the research, said: “Construction bosses have been forced to dig deeper into their own pockets to help their companies survive.
“Many directors will be worried about Carillion’s collapse and the knock-on effect it might have on their businesses - many will have already seen an impact.”