Hospitality SMEs living ‘on the breadline’, finds study
Published this week by finance providers GE Capital, the study reveals that only one in eight medium-sized enterprises (SMEs) in the leisure and catering industry believe that they have enough cash to see them through any unforeseen situations.
On the other hand, one in six businesses say they are “living on the breadline”, with only a minimum amount of cash to cover emergencies.
“With so many businesses under pressure due to increased competition, a decline in customer spend and increasing costs of raw materials, it is worrying that so many are not in a position to deal with an emergency should it arise,” said John Jenkins, CEO, GE Capital.
Additional funding
The study, which was conducted by the Survey Shop on commission from GE Capital, interviewed 500 owners or managers of businesses with between 10 and 249 employees in March 2010.
It found that SMEs in all sectors have been hard hit, with the South West and the North West are the two regions that seem to be struggling most with available cashflow.
In the leisure and catering sectors, SMEs said that although they felt there were opportunities for getting loans for their businesses, around half of owners said that more transparency on charges would was important when looking for funding.
Significantly, 52 per cent said they wanted better advice on alternative funding, compared to 22 per cent in a similar survey conducted in 2008.
“With many SMEs desperately seeking additional funding, it is good to see that there is a strong belief, among small and medium sized firms, that competition does exist in the market,” said Jenkins.
“This will clearly serve to help them through times of both growth and of hardship. SMEs and their advisers should be aware of all the funding options available to them to ensure they have sufficient access to cash when they really need it.”
