The Leisure Fund, which has been created to support financing of the leisure industry, has come about after new research revealed that, despite being optimistic about 2013, one in four UK leisure businesses feel they are losing out to competitors because of a lack of investment.
“It’s great to see a sense of optimism returning to the leisure market," said Andrew Taylor, head of leisure for commercial banking at NatWest and RBS. "In terms of investment it is vital to be able to invest in the quality of your assets, probably more so than other industries.
"But it is the long-term impact which is potentially most damaging, as putting off investment in the short term could end up with businesses facing large capital expenditure bills in the future,” he added.
The Leisure Fund
The new fund will allow leisure businesses to take out a loan of £100k-£10m on a secured or unsecured basis. Businesses will pay no arrangement fee and can take up to a five-year term.
The Leisure Fund also comes with the option of two capital repayment holidays which businesses can take in any point during the loan period apart from the first 12 months.
"We have listened to the needs of our leisure clients and tried to design something unique to support the needs of this particular industry," Taylor explained.
“Generating around £97bn of GDP and nearly two million jobs, the industry is vital for the UK economy and we are dedicated to supporting leisure businesses.
“Leisure is a key industry and one that could play a massive role in the recovery which is why we have set up a team of specialist relationship managers who operate across the sector," he added.
The banks' research has showed 30 per cent of small and medium enterprises (SMEs) don't feel they invested sufficiently in 2012 to remain competitive. A majority of leisure companies think investing in a refurb or new equipment would make a positive impact on their business.
Announcing the creation of the fund, NatWest and RBS also suggested leisure businesses might consider taking out a loan in order to 'weather-proof' their venues given the problems a wet summer can bring.
News of the fund's launch has been welcomed by VisitEngland which assisted the banks in drawing up the terms of the loans. James Berresford, VisitEngland's chief executive, said: “Whilst over the past decade the quality of the visitor experience in England has excelled, we need to ensure that we keep on top of our game to beat off competition from overseas destinations.
"Our reputation as a top quality must -see destination relies on our ability to provide high quality experiences across all sectors of the industry. Continual re-investment is therefore paramount to achieving consistency – something which is vital in securing repeat visitors and those we are welcoming for the first time,” he added.
For more on funding your hospitality business, check out our special Funding Hospitality feature here.