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Mon 13th Jun 2022 - Bank lending to sector SMEs falls by more than £1.4bn following end of coronavirus loan schemes
Bank lending to sector SMEs falls by more than £1.4bn following end of coronavirus loan schemes, recovery loans ‘higher risk’ and ‘less generous’: Bank lending to small businesses in the sector has fallen by more than £1.4bn following the end of coronavirus loan schemes, according to new research. Since the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) ended, lending dropped to £14.6bn in April 2022, down from £16bn in March 2021, according to chartered accountants and business advisers Hazlewoods. With the cost-of-living crisis eating into consumer spending, banks have been less willing to lend to pubs, bars, restaurants and hotels given their perceived higher risk of default. This following two years that have “weakened the sector significantly through spiralling inflation and repeated closures through lockdown”, said Hazlewoods. “Banks are really starting to back away from lending to hospitality businesses,” said associate partner Rebecca Copping. “Without financial support from lenders, some pubs, restaurants and hotels are really going to struggle. With a cost-of-living crisis weakening consumer spending, securing bank lending at viable rates is no easy task for hospitality businesses at the moment.” Hazlewoods also argued the government’s new recovery loan scheme (RLS) is markedly less generous than the CBILS and BBLS schemes it replaced, meaning banks are less keen to lend to small and medium-sized enterprises (SMEs) through it. Under RLS, the government no longer pays the first 12 months interest on behalf of businesses, nor the lender’s fees, while interest rates for borrowers have also risen. Under the RLS, the government guarantee to a lender is only 80% of the amount loaned to a business, rather than the 100% under the CBILS and BBLS schemes. Copping added: “SMEs planning for the end of their CBILS and BBLS loan terms may find that they struggle to refinance their debts at rates that work for them.”

UKHospitality appoints Sandra Kelly as new skills director: UKHospitality has announced the appointment of a new skills director, Sandra Kelly, to shape the future framework of skills in hospitality. Kelly was previously the UK director at People 1st International and has had nearly 30 years of operational and strategic experience across the hospitality sector. UKHospitality said the new role will be critical to the delivery of its recently launched hospitality workforce strategy: fixing the crisis, which is a framework for collaborative action to address five key workforce challenges. The role will cover skills in secondary, further and higher education, with a renewed focus on apprenticeships and other in-work training. UKHospitality said it will continue to work with industry partners, training providers and educational institutions to provide the perfect pathway for people of all ages to realise their ambitions to join and grow in hospitality. It will focus on short-term challenges but also look to fix the pathway into hospitality, and upwards progress, for the long-term. Kate Nicholls, chief executive of UKHospitality said: “Hospitality is facing a workforce crisis. We are determined to tackle this for the fantastic businesses in the sector and to provide fulfilling jobs that boost social mobility. I am delighted to welcome Sandra and her wealth of knowledge and experience to the team to drive this forward. This appointment allows us to look at the short-term opportunities to tackle our current labour crisis but also to ensure there is a pipeline of talent that ensures we have great people joining hospitality and experiencing the opportunities we can provide.” Kelly added: “Joining UKHospitality is a fantastic move for me and allows me to deliver on my passion – providing hospitality employees with the skills they need to succeed. I am thrilled to be able to bring a focus on skills policy development to UKHospitality and ensure the voice of our employer membership is central to setting this skills agenda with a united voice into Government.” UKHospitality will continue to work with People 1st International as the licensed Sector Skills Council for the industry, which will play a critical role in taking forward the skills measure outlined as one of five strands in the hospitality workforce strategy.

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