Fallout will see banks toughen up lending criteria, consultant warns
Mace has said that Interserve鈥檚 collapse into administration three months ago will mean its peers and subcontractors will be hit with increased costs.
In its latest tender cost update, the consultant said the ramifications would mean contractors and subcontractors will see the cost of business increase with banks putting the squeeze on the terms of their lending conditions.
It said Carillion鈥檚 collapse had led to lenders tightening credit conditions and greater due diligence from clients, adding: 鈥淚nterserve鈥檚 failure will likely result in even tougher [lending] criteria, changes which will only add to the costs facing contractors and sub-contractors.鈥�
And the firm said: 鈥淲hile a relief to employees and the supply chain, [Interserve鈥檚 administration] once again highlights a major problem for tier one contractors, in particular those also involved in outsourcing.
鈥淏y operating on such fine margins, it doesn鈥檛 take many projects going wrong before there is significant damage to a firm鈥檚 viability."
Elsewhere, Mace said ongoing Brexit indecision has seen it slash its tender price forecast for 2020 fr