Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Banks accused as construction firm Harry Lynch is forced under

The Civil Engineering Contractors Association has accused banks of being short-sighted after one of its founding members went under last week.

Building and engineering firm Harry Lynch was placed into liquidation by administrators KPMG, making 21 staff redundant.

The West Lothian based firm had failed to pay a bill of £24,131.97 to a builder’s merchant who raised a court action against them.

But Harry Lynch had itself been hit by the collapse of Scottish housebuilder MCA Homes in November, for which it was carrying out civil works at a housing development. MCA’s collapse meant it defaulted on a £97,000 debt to Harry Lynch.

Bosses at Harry Lynch say they arranged several meetings with the firm’s lender, the Bank of Scotland, in a bid to ease the cashflow problems.

Ceca Scotland chief executive Alan Watt expressed dismay at the demise of Harry Lynch, which he described as a “stalwart contractor in a close knit community”.

Mr Watt added: “It is deplorably short sighted if, as appears to be the case, a bank can decide on the future of a healthy business on the basis that the wider construction industry is not a safe bet in the current climate.

“Harry Lynch and his employees deserve a better explanation than that. Support does not appear to be getting to the people who need it.”

Accounts for the year ended 31 December 2008 revealed Harry Lynch had £163,583 of stock and work in progress as well as £129,697 owed to it and £4,683 of cash in the bank.

The accounts also showed the firm had debts due within one year of £262,987, including £120,001 owed to its bank.

The accounts said the firm would continue to “trade for the foreseeable future”.

But they added that the future of the company was “dependent upon the continued support of the company’s directors and the Bank of Scotland”.

The Bank of Scotland said its risk assessment processes were designed to ensure that business customers did not take on debt they could not afford to repay.

Managing director Harry Lynch said the firm should have been eligible for Government initiatives such as the Working Capital Scheme designed to get banks lending to businesses.

He said: “I think it is disgusting. They have completely ignored these Government directives aimed at helping small businesses.”

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.