Britain’s hospitality industry has been booming in the past few years. Despite various changes in the political and economic landscape – the effects of Brexit on the industry are still yet to become apparent – the sector was predicted to pull in £100bn over the course of 2018.
The hospitality and leisure industry as a whole is the fourth largest employer in the UK and is also an area that consumers are consistently spending money on – in fact, the average family spends around a fifth of their weekly budget on leisure.
However, it hasn’t all been smooth sailing for the industry, as a number of high street restaurant chains have closed their doors over the past year. This uncertainty, combined with the high level of competition, overheads, and restaurant failure rates, means that it can be tricky for budding restaurateurs to find a bank willing to offer a business loan. Additionally, most banks expect to see finance records and long-term business plans, which can be a struggle for new businesses to provide.
The high costs associated with running a hospitality business – such as kitchen and bar equipment, fit-outs and expansions – means that accessing additional finance is often the only way to go. If your business is just getting off the ground, a short-term loan can give you the cash injection you need to ensure a steady flow of cash during the initial stages.
Getting the equipment you need to grow
Buying equipment outright uses up valuable working capital that could be better put aside for more time-sensitive requirements, such as purchasing stock or paying staff. You also may be tempted to go for cheaper deals rather than investing in state-of-the-art equipment to save money while your business is just starting out. However, this is a false economy, as cheaper equipment tends to be less reliable and will need replacing much sooner. Asset finance allows you to buy the highest quality items that can be paid off monthly according to a flexible plan that suits you – if you are a seasonal business, we can tailor the finance solution to fit around your cash flow.
It’s the struggle of making an outright cash purchase that drove one of our clients to approach us to figure out the best finance solution to get their business up and running. The coffee shop business is a rising star in the UK economy, with a 10.7% year-on-year sales growth, so we were keen to help our client capitalise on the market and establish their innovative coffee cart business. The company offers van packages to give baristas everything they need to start their own mobile coffee business, so we joined forces with them to offer finance packages from as little as £50 per week. As a result, they have significantly expanded their market reach and can offer their customers affordable finance deals.
In an ever-evolving industry, it’s important to make sure your business is growing with it. Investing in the latest equipment can take your business to the next level, and we offer a range of flexible finance options to allow you to do just that.