BHA welcomes bank lending scheme for hospitality businesses

By Luke Nicholls

- Last updated on GMT

Related tags: Debt

The National Loan Guarantee Scheme will allow smaller hospitality businesses to access loans with lower interest rates
The National Loan Guarantee Scheme will allow smaller hospitality businesses to access loans with lower interest rates
A £20bn government scheme to boost bank lending to small and medium-sized enterprises (SMEs) has been welcomed by the British Hospitality Association (BHA).

The National Loan Guarantee Scheme (NLGS), launched by Chancellor George Osborne today, will allow hospitality businesses with an annual turnover of up to £50m to access loans with interest rates one per cent lower than those outside the initiative.

“We welcome the National Loan Guarantee Scheme,” a spokesperson from the BHA told BigHospitality. “One of the main problems facing hoteliers and restaurateurs – particularly independent owner operators - is the difficult in obtaining bank finance for expansion and development.

“The scheme will certainly make this a little easier for those hospitality businesses which want to invest and grow.  We have no figures to estimate how many will take advantage of the scheme but any assistance in making funding for growth easier will be welcomed by hospitality businesses.”

Upon delivering details of the new initiative, Osborne said: “The Government promised to help small businesses get access to lower interest rates. Today, we deliver on that promise with a nationwide scheme.

“It’s only because we’ve earned credibility with our deficit reduction plan that we have low interest rates, and it’s only because of this scheme that we can pass the benefits of those low rates onto businesses.” 

Forum of Private Business

Although the NLGS brings some good news for the hospitality industry ahead of tomorrow’s 2012 budget, the Forum of Private Business is calling for better lending information to support the scheme and more support for alternative funders, to help them compete with banks.

While the not-for-profit employer organisation welcomes the scheme in principle, it warns that credit easing must work for the smallest businesses that need it most – small businesses are seeking loans of approximately £20,000 on average, according to figures from the British Bankers’ Association (BBA).

“Small business owners are being expected to drive the economy forward yet find that relentless cost increases, mounting late payments and continued credit restrictions severely hinder their ability to control cash flow,” said the Forum’s senior policy adviser Alex Jackman.

“Cash is the lifeblood of any business and there must be definite action in the Budget if we are to mend this cash flow crisis among small firms.”

Related news

Show more


Follow us

Hospitality Guides

View more

Featured Suppliers

All suppliers