Alternative finance provider Liberis has allocated £30m of new lending for the hospitality sector to meet demand. As banks continue to refuse credit* to small businesses, Liberis has seen a 300% increase in demand from hospitality companies over the last two years requiring funding for new stock, new equipment, refurbishments and to plug seasonal cash flow gaps.
Says, Liberis CEO, Paul Mildenstein, “The economy is picking up and these businesses need capital to finance projects for improvement and growth which will make them more successful. Yet the funding is still so hard to get because they don’t fit the banks’ outdated lending models. Our lending criteria is based on future card sales which is much more pertinent to a hospitality business and we say yes to 90% of businesses who apply.”
Liberis’ business cash advance provides companies with an unsecured cash injection of between, £2,500-£300,000 with repayments based on a set percentage of the business’s future credit and debit card takings until the amount is paid back. This means that the money is only paid back as the business earns, so it’s completely linked to cashflow.
“Hospitality businesses tell us our funding suits them because it’s so flexible. There’s one cost agreed at the outset, with no time limit on repayment so it fits with the seasonal highs and lows, says Mildenstein. ”
The application process is quick and straightforward and doesn’t require business plans, surveys, legal or accountancy advice. Funds are usually with the business within 7-10 days of application.
*The Bank of England’s latest Trends in Lending report published recently said the stock of lending by banks to small firms has continued its four-year decline, contracting by £0.5 billion in the three months to February 2014.