King’s Lynn’s Complete Commercial Finance asks now that the summer season is over are businesses winter-ready
Staycations have boosted the leisure and tourism sector this summer, but is your business ready for the winter months ahead, asks Michael Moore of Lynn's Complete Commercial Finance.
From Arthur Ransome to David Bowie, East Anglia is a region inextricably linked with tourism and leisure, and the sector has a ripple effect which touches many households in North West Norfolk. VisitEngland estimates that across Norfolk and Suffolk, the tourism, leisure and hospitality sector is worth £5.4bn and accounts for 120k jobs.
It comes as no surprise then that many in the sector are watching keenly to see what comes next as the COVID-19 pandemic plays out. Some in the industry have described 2020 as ’three long winters’ in terms of the financial effect the virus has had on their businesses. This week’s headlines announcing that pubs, restaurants and other hospitality venues must close at 10pm is a further blow to many already strained businesses.
As one of the first sectors to be closed down and the last to reopen after lockdown eased, even then with social distancing restrictions imposing reduced capacity and revenue, the effects have been felt deeply. The Government has offered financial support through tax reductions, loans, grants and the Eat Out To Help Out initiative, alongside the furlough scheme, but many are still experiencing difficulty and face worrying times ahead.
In June, Norfolk accountant and business advisory firm MHA Larking Gowen published a report which surveyed 38 local businesses who collectively employ 2,400 full and part-time staff, with a combined annual revenue of £171m.
In early summer, they estimated that the loss of the spring period, when many earn 30 per cent of their annual profits, meant they were looking at a 48.7 per cent reduction in turnover due to COVID-19, and that one in five staff could be made redundant before the Government’s furlough scheme ends on October 31.
Even firms which have enjoyed a bumper summer due to high demand from staycationers face the potential threat of further restrictions if the infection rate continues to climb. While some have built good reserves, autumn is traditionally a period to take a careful look at finances and plan for the leaner winter months.
We work with many leisure and tourism businesses of all sizes across the region, and it comes as no surprise that this year there is an even keener focus on financial reviews and planning for 2021. Many clients are surprised to discover that there are more options to borrow for the leisure and tourism sector than high street banks may have available. Often a specialist lender will consider future turnover and offer a seasonal cashflow facility where a more traditional lender will not.
While Government support has been a lifeline for some companies, many took a Business Bounce Back Loan early in the pandemic, and consequently are unable to qualify under the Coronavirus Business Interruption Loan Scheme. This is just one scenario where working with a commercial finance firm such as ours offers a wider range of funding options to weather the months ahead.
There are definitely options to consider and more lenders are coming back to the market with renewed interest to support businesses looking to steady their footing and expand. Taxes are a
certainty and with many leisure and tourism firms needing to undertake annual repairs and renewals, commercial finance can offer a support if summer takings are lower than forecast at the start of 2020.
We understand the needs of the sector well, and it’s one of the reasons why we are proud to be sponsoring the leisure and tourism category at this year’s Mayor’s Business Awards. As with any type of business planning, the key is to think ahead and be proactive about finance – talk to us now to maximise the options available to your business. If the pandemic has taught us anything, it is that we never know what’s ahead, and it pays to be prepared for whatever life throws at us.
Contact Complete Commercial Finance on 01553 611619 or visit ccf.finance