Following a lengthy period of unprecedented disruption, hospitality businesses across the UK are once again gearing up for growth. So, what financial options are out there today?
Meeting hospitality business’ cash flow needs
Whatever your circumstances, there are a few funding options to choose from.
- Hire new employees
- Purchase more stock or inventory
- Purchase new equipment (e.g. refrigeration equipment) machinery or vehicles
- A refurbishment of your premises
- A gap in funding
Alternative (or non-bank) lenders have been funding businesses of all shapes and sizes for years. In addition to this, the Recovery Loan Scheme (RLS), the newest iteration of government supported lending has recently gone live and will enable many more businesses to get the vital funding they need.
1. Unsecured loans
2. Revolving credit facility
A revolving credit facility is a flexible finance type that enables you to access finance for your hospitality business on a ‘tap in, tap out’ basis. You can withdraw money when you need it, use it to pay for something, repay it then withdraw it again at a later date. And with a revolving credit facility, you only need to pay interest when funds have been ‘tapped’ into.
A merchant cash advance differs from a traditional loan in the sense that instead of making fixed monthly repayments, you only pay it back as a percentage of your future customer card transactions. It’s flexible to your sales intake – meaning you less more when you’re trading less and vice versa.
When it comes to securing an asset in the hospitality sector, there’s often no time to waste.
The problem is, the capital to buy new equipment isn’t always readily available.
- Air conditioning
- Catering equipment
Whether you need to pay a supplier, redecorate, get additional stock or boost your working capital, a business credit card can be the lifeline your business needs. Depending on the credit card you choose, there’s also the added benefit of cashback or rewards.
Financial support from the UK Government
Find out what support you’re eligible for from the Government, if you haven’t done so already. To recap, here’s what’s available (for the full information, visit the Government’s business support page).
Local Restrictions Support Grant (second payment)
This covers the period between 16 February to March 31 2021 and is available through your local authority. Businesses required to close will receive up to £4,714 for the 44-day qualifying restrictions period, depending on the rateable value of the property.
Applications for payments for this period close on May 31 2021.
The Coronavirus Job Retention Scheme (CJRS)
This is currently set to finish at the end of September 2021 and is available for all eligible firms across the UK, including hospitality businesses.
The SEISS is for self-employed individuals whose businesses have been negatively impacted by COVID-19. Those looking to claim the fourth grant must make their claim on or before June 1.
5 per cent reduced rate of VAT
The 5 per cent reduced rate of VAT for goods and services supplied by the tourism and hospitality sectors will run until the end of September 2021. The rate will rise to 12.5 per cent from October until the end of March 2022, and return to 20 per cent from April 2022.
In England, the 100 per cent business rates holiday for the retail, hospitality and leisure sectors is due to end in June 2021. For nine months afterwards, businesses will receive 66 per cent relief (capped).
Discover your eligibility
In just a few easy steps, you can find out what finance you might be eligible for to help you get back on track (or set your growth plans into action).
To start the process, just let us know how much you need, what you intend to use the funds for and how quickly you need them. Our team of Business Finance Experts are here to help you throughout the process, from starting the application to money in the bank.
Explore your funding options today
Merlin Griffiths: ‘We are creative, resilient, adaptable – this is hospitality!’