The hospitality industry in Scotland is one of the most resilient and dynamic sectors in our economy, however it’s been affected by Covid more than most, due to the imposed restrictions and unclear and ever-changing guidance.

Despite the Scottish Government pledging £400m of support, many wedding venues and hotels are finding it difficult to access debt funding as they now have no trading history for the last 12 months.

A typical small hospitality business has taken on between £60,000 and £90,000 in bank debt and deferred bills as of February this year just to survive Covid, with that debt rising with every week of low or no income. (source: The Scotsman, 12 May 2021)

Despite easing of restrictions, hospitality remains one of the worst affected industries.  

Figures from the Business Insights and Conditions Survey (BICS) collated by the Office for National Statistics and published by the Scottish Government, show only 41 per cent are currently trading and 76 per cent have lower turnover than expected – more than twice the all-industry average.

Nearly half – 46 per cent – say they have less than three months’ cash reserves, if any, and 8 per cent fear they won’t survive the next three months, again more than twice the all-industry average. (source: The Scotsman, 12 May 2021)

What support is available?

From speaking to wedding venue operators, these businesses are seeing an encouraging surge in bookings as far in advance as 24 months ahead, such is the pent-up demand.

Venue operators are looking to invest in premises to not only make them Covid compliant but to accommodate the increased demand.

Access to government support has been essential to cover losses as a result of being closed over lockdown, but some operators are finding access to growth funding such as the recovery loan scheme challenging, combined with tepid appetite from many funders in the market to support the industry until all restrictions are lifted.

As a commercial finance expert, Breadalbane has supported several wedding venue operators by looking at raising funds for growth and expansion.

Utilising our unique panel of lenders who are committed to supporting the hospitality industry, we have used the assets of these hospitality businesses to raise cash.  

In addition, existing owner operated venues are looking to refinance existing debt held against their properties as a way to not only unlock much needed capital, but also to restructure existing debt to lower monthly commitments and build some headroom in their working capital.

We understand that every business is different and it’s our aim to find the most appropriate business funding solutions for you. If you’d like to learn more about the options available to you, such as asset finance, bridging finance or commercial mortgages or to discuss any other aspect of this blog in more detail, please do not hesitate to contact us today.