July 2020 Business Finance Update

So we have had a lockdown landmark in the hospitality trade and pubs and restaurants have now reopened.  How is the industry going to recover and get revenue flowing back again?

Are lenders now looking at the hospitality industry and a less risky industry now?

It was a complete landmark on Saturday. An exciting time for a lot of people around the UK. It’s been quiet for all of them for a number of months now and obviously it’s been worrying.

If I focus on that lender’s point of view. It’s not necessarily the case that the floodgates have opened and the pubs, restaurants and the hospitality sector will be open and back to normal and businesses can borrow whatever they want. Lenders will now take a lighter view on the last three months, and bank statements. Within a few weeks lenders will start to see the improvement in these numbers.  If you’ve obviously got quite a high income and quite a lot of funds coming in, it’s going to mean that they’re more than happy to lend to those facilities.

So the risk factor ultimately is a massive point for our lenders. The risk factor a month ago with pubs and restaurants was huge. Now, that is not the case because they have opened and they’re starting to see more income. So the worry will be less. They’ll not only be looking to lend, but they’ll be looking to lend more and over bigger periods because they can appreciate,  because trade has been away for so long, the income might even sort of double in the next couple months, hopefully, if the weather stays nice as well.

In summary they’ll still be cautious, but definitely not as cautious as they were before. The tentativeness is still there, of course. We’ve got a number of products that we’re working on at that moment with specific lenders that are going to allow pubs and restaurants and the hospitality sector to be able to look at funds.

Get in touch and just have a conversation with us. We’ve definitely got enough experience with lenders to guide you in the right place after looking at the documents that we asked you to provide us. Hopefully we can point you in the right direction to say now might not be the right time. But look, in a couple of weeks time, once we can see a little bit more income coming in on the bank statements, it might be a better time for us to move forward with it.

Do you think we will see a phasing out of the government backed schemes and commercial lending moving to the forefront? What do you think the next six months will look like?

We have almost weekly updates with all of our lenders. The conversations take the forms of: what they are seeing, what industries they are opening up to. We also had a webinar recently which had a fantastic graph on the CBILS (Coronavirus Business Interruption Loan Scheme) and got to see the timescales of when that really made an impact.

The one thing that we’ve seen with the Bounce Back Loan is that once you have taken it, you cannot go back to it, so if your business did not optimise the full £50,000 and took less, you cannot go back for more.  The end of the bounceback loan is starting to come in now.

Commercial lending is now going to take the forefront. For all businesses, lending is going to be a big part of driving it forwards. I mean, you got to remember, lenders have been quiet over this time also. So they will be keen, albeit tentative, to work again and have conversations with businesses on how they can try and help.

Do you think things are improving?

Yes – things did seem rather bleak, but week by week it feels like another stepping stone. Obviously, the opening in the hospitality sector has been huge. There was so much fear within those industries over the past couple of months, and rightly so. But now there is a light at the end of its tunnel and fingers crossed and start having more conversations.

If you are in two minds about whether you will get funding have that conversation with us. As I said, we’ve got the experience to hopefully guide you in the right position to figure out if it is the right time. We would always try to find the best solution for those businesses so we wouldn’t we wouldn’t jump the gun before needs be.

You have an eligibility checker on your website?

Yes we have a really easy to use eligibility checker on the website that will give you a kind of indication straight away. But it’s not all computer driven. The team here use the current knowledge and experience to review information on a case by case basis.  We can go back to people that previously applied, etc. and help them get the funds they need from our application process. We’re very personable. We’d like to have those conversations with people. It’s not, as you said, an automated yes or no type of thing. You’ll put your details through. You will be getting a call within 24 hours just to chat and have that conversation on how we can help and what the next steps are moving forward.

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