ACCESS to finance remains crucial in the licensed trade, whether it’s a first time licensee debuting with a new venue or an experienced operator looking to fund a major refurbishment.
However in the current climate of political and economic uncertainty regarding the UK withdrawal from the European Union, and the subsequently weakened pound, securing capital for investment can be challenging.
Although the full impact of leaving the EU is still to be felt and Brexit remains an ongoing concern for firms, Paul Smith, corporate development director at Barclays, said banks “remain open for business”.
“Our lending availability and approval rates have remained steady since the EU referendum and we continue to lend to an SME business in the UK on average every four minutes,” he said.
“As negotiations continue, there remains uncertainty and many businesses will be looking at their future plans and resilience of their finances.
“At times like this, clients need the support and advice of their bank more than ever and we are fully committed to guiding them through.”
Tennent’s, which has invested a claimed £45 million in the Scottish on-trade in the past six years, said it is continuing to ramp up the support it offers operators north of the border.
With a five-strong investment team in Scotland which has the “sole aim of supporting premises’ business objectives through funding”, the brewery said it can offer investment tailored to meet a variety of needs.
Martin Cairns, trade investment manager at Tennent’s, said the process is designed to be “as simple and straightforward as possible”, no matter what the project.
“Obviously we would wish to be involved from the outset but no matter what stage operators are at on their business plan/investment proposal, we want to speak to them to tailor and deliver the best solution for them and their outlet,” he said.
At times like this clients need the support and advice of their bank more than ever.
“Our investment support covers every requirement from new signage to installing a kitchen, from licensees starting up and contemplating their first outlet through to experienced operators who are looking to acquire new premises or refinance existing borrowings.”
As the range of projects that can be supported has broadened, so too, it seems, has the range of financial support available.
Catherine Anderton of SME Business Finance said the variety of options now on the market can meet the individual needs of different clients.
“There are far more options now than even a couple of years ago, including cash flow options and a wider range of assets, and costs that can be financed, including very ‘soft’ assets and also refinancing or retro-financing of items that have already been purchased, installed or fitted such as EPOS systems and fire alarm systems,” she said.
Despite the seemingly broad range of finance options available, there are certain steps operators can take to give their application the best chance – starting with the basics.
“Licensees and operators can maximise their chances of acquiring additional business finance simply by being armed with the right financial information,” said a spokeswoman for finance provider Liberis.
“This includes making sure they’re familiar with their own credit reports – both business and personal – which can be checked with free credit score checkers.
“It’s important that business owners understand how these credit reports work, and what they say about their businesses to potential lenders.
“It might be worth checking out how you look online too in terms of your online reviews, how you appear on social media and in Google searches – lenders may use these channels to understand the performance and customer reputability of your business.”
Chartered accountancy firm French Duncan also advised operators to ensure they request sufficient funds for a project.
“Applicants should consider the funds they need under different scenarios,” said Iain Walker, corporate advisory director at French Duncan.
“A common mistake for applicants is to be too confident and to make requests for funds that are insufficient. This can impact the ability of the operators to implement their business plan, and may also result in a loss of confidence by the funder.
“A level of cushion should be left in the funding request, which can be determined through scenario analysis.”