There’s no denying that restaurants, and the hospitality sector in general, are seen as volatile by traditional lenders. And, these traditional bank lenders just aren’t willing to take on the risk that comes with funding these types of businesses. In fact, it is estimated that restaurants are 39 per cent more likely to fail than a typical business. Add to that all the overhead costs and high levels of competition, it’s no wonder restaurateurs are so keen to find viable avenues for funding.
The irony is that despite the lack of access to growth capital via traditional means, many restaurants are healthy businesses whose services are very much in demand, making them primed and ready for growth. Fortunately, there are alternative means of business funding available that can provide the influx of capital necessary for restaurants to expand.
Every day Boost Capital, an alternative finance solution specialising in the hospitality sector, sees restaurant owners who have profitable businesses that demonstrate good cashflow and show the desire and capacity for growth, but are unable to secure financing from their bank.
Take Sen Nin for example. Initially, restaurant owner, Naresh Kapoor, tried to acquire funds through traditional channels, but was told that the banks just aren’t lending. Not willing to put his plans on hold, Naresh researched alternative means of financing and discovered Boost Capital. After receiving a business loan from Boost Capital, he was able to completely refurbish the north London location of his business to attract new custom and contend with new competition opening in the Islington area.
Having worked with many restaurant owners, Boost Capital have come to understand the hospitality industry. A simple infusion of cash can do wonders. Our business loans have been used towards:
- New equipment purchases
- Restaurant renovations and expansions
- On-licence renewal fees
- Marketing and advertising
- Seasonal volume increases/decreases
- Hiring and retaining talent
According to consultancy Allegra Strategies, around 19 million people eat out at least once a week in the UK. This is an increase of 2 million diners since 2012. Not to mention, the sheer volume of restaurants throughout the country; in London alone, there are more than 12,000 eateries!
As long as there are people who want to eat out, restaurants will continue to be a staple in the UK economy. And if the only obstacle standing in the way of an enterprise’s success is access to funds, funders like Boost Capital will continue to provide business loans to help these restaurateurs fulfill their growth potential and thrive.