With more and more closures occurring throughout the hospitality sector, it’s evident that restaurants, cafes, hotels and many other hospitality businesses across the UK are struggling. The widespread appeal for VAT to be slashed to 10% is gaining traction – top chefs, including Tom Kerridge and Ravneet Gill, are getting behind the motion, calling for VAT rates to be reduced so that they sit in line with the rates seen in other European countries such as Germany (7%), Ireland (9%), France (10%), Italy (10%) and Spain (10%). The standard rate of VAT in the UK is much higher, at 20%.
It’s been a tough time for hospitality businesses since the Covid lockdowns of 2020 & 2021, followed by the war in Ukraine and mounting costs and pressures from all angles in the years since. Many businesses are working with tricky, unpredictable markets, which is why having reliable business finance can quash cash flow worries and allow you to push ahead with exciting opportunities that promise game-changing ROI or offer access to an untapped area of the market.
What can I use my business loan for in the hospitality sector?
Hospitality businesses come in all shapes and sizes – whether you’re a family-run cafe or an emerging hotelier, business finance can be suited exactly to your operations, allowing you to expand, upgrade and invest while revenues grow. With many hospitality businesses experiencing seasonal fluctuations, business finance is also a useful stopgap to keep cash flow consistent and smooth. Here are some other examples of what you might need to use your injection of cash for when securing a loan for your hospitality business:
- Costly kitchen equipment replacements, upgrades or repairs
- Site expansions or renovations
- Temporary agency staffing for peak seasonal periods
- Enhanced marketing efforts
- Energy efficiency or accessibility upgrades
The benefits of a business loan from White Oak UK
The hospitality sector is a tricky place to be right now, and we want to support your business. White Oak UK can act as your trusted partner, ensuring you continue to thrive in the face of any market challenges. Here’s how we make things easier for our customers:
SIMPLIFIED APPLICATIONS – We want to make good business finance accessible for all. No jumping through hoops, no trying to find that obscure paperwork from years ago, just the stuff we actually need to go from proposal to payout.
TRIED, TESTED & TRUSTED – We’ve been doing this since 1986. Our team is made up of friendly, knowledgeable experts who are based in the UK and readily available at the other end of a phone. We bring the convenience of automation as well as the reassurance of the human touch.
STRIVING FOR SUCCESS – Our favourite thing about doing what we do is the success stories from previous customers – take a look at them for yourself here.
MANAGEABLE REPAYMENTS – All of our business loan products are designed with affordability in mind. Transparent fees, clear timeframes and a repayment schedule that works for you.
Hospitality Finance in Action: Futureproofing a Family Farm
Our finance products can help make a tangible difference, with a perfect previous example being when we assisted a farming client in their diversification move towards hospitality, leisure and tourism. The client is a third-generation farm owner running a 370-acre mixed arable and livestock business with a family legacy. The farm produces grain that is sold to established buyers, while high-quality malt barley goes directly to market. In addition, beef cattle are reared and sold seasonally to major processors, contributing to the farm’s steady annual turnover.
However, with the recent market struggles hitting the agriculture sector hard, and the farm being based in rural countryside with an archaeological site on the land that includes a 4,000-year-old chapel, our client identified strong potential to attract visitors and create additional revenue. The idea: build and rent out holiday lodges that combine farm stays with unique heritage experiences.
With a £20,000 loan from us, our client was able to purchase the first holiday lodge and take the first pivotal step in becoming a more resilient operation.
Read the full case-study details here.
Check if your retail business is eligible for a loan
We know that there is no ‘one-size-fits-all’ financial product for you and your business, which is why we work with all clients on a case-by-case basis. As a general rule, though, you can expect to demonstrate the following as part of any business finance application process:
- Be registered as a UK SME or mid corporate
- 3 years minimum trading history
- A track record of profitability
Sound good? Get in touch with one of our experts on 0333 014 9000 or check your eligibility instantly online now.
Solve key industry challenges with a fast, flexible facility
Every sector comes with its own unique challenges and considerations – we do our best to understand and appreciate the nuances of those faced by businesses in the hospitality sector.
Rising Costs & VAT
Hospitality businesses are still being squeezed by a powerful mix of higher wages, employer National Insurance contributions, business rates and inflationary pressure on food, drink and utilities. Recent UKHospitality analysis says these cost increases have pushed many operators into loss-making territory, with businesses forced to cut jobs, reduce hours and cancel investment just to stay afloat. A flexible business loan or cash flow facility can help cover overheads, protect margins and give operators room to adapt without sacrificing service. Our specialised VAT loans can also help you take the pressure off your HMRC bill, allowing you to pay it over a longer schedule.
Staffing Shortages
Recruitment has long been a major headache for the hospitality industry, with persistent vacancies across both back and front of house positions. Currently, staffing pressure is being intensified by higher wage bills, tighter immigration rules and retention issues. Access to working capital can support your business through these issues via better pay, retention incentives and smarter rota planning.
Consumer Price Sensitivity
Demand is still there; however, customers are being more selective with their spending. Additional funding can help your hospitality firm invest in loyalty offers, menu refreshes, marketing uplift and value-driven experiences that entice customers and create returning regulars.
Sustainability and Compliance
Sustainability and the required reporting around it are quickly moving from ‘nice-to-have’ elements to a critical compliance headache. Insights from UKHospitality reveal that while SMEs and smaller businesses won’t be required to comply in the initial rollout, they may still be affected as larger hospitality operators and corporate clients demand sustainability data from their supply chains. Business finance can help you get ahead of the impending regulations and begin reporting with clarity and confidence.
Use our flexible restaurant and hospitality business finance to overcome sector-specific obstacles – apply online now.
Is my cafe or restaurant business eligible for a loan?
Exact criteria will depend on the financial product that you choose to apply for, and we strive to assist all businesses (regardless of age, turnover and size) in finding a product that works for them. The quickest way to get an answer on your eligibility is to use our instant online checker.
Got a specific question about our hospitality business loans? Not sure if you meet the criteria? Call one of our experts on 0333 014 9000 for a friendly, informal chat about your business and any financial requirements.
Finding the right financial fit for you….
We offer a choice of different financial products that can be tailored to the technology, digital, IT & media sector. You can browse the full selection on our product page, but the popular options for businesses like yours include:
Invoice Finance
Got slow-paying customers or seasonal cash flow gaps putting pressure on your hospitality business? Our invoice finance facility helps take the strain off by unlocking the value in your unpaid invoices, turning money tied up in outstanding payments into accessible working capital. That means more freedom to cover suppliers, payroll and day-to-day running costs without the wait, and no more using your precious time chasing up those payments yourself.
Asset Finance
From kitchen equipment to dining furniture, refrigeration and refurbishment projects, hospitality businesses often need reliable assets to keep service running smoothly. Our SME asset finance facility can help you spread the cost of essential purchases, with borrowing amounts between £5k and £1.5m, making it easier to invest in the tools and equipment your business needs to grow.
VAT Loan
Need help managing a VAT bill without disrupting your cash flow? A VAT loan can give your hospitality business the breathing space to stay on top of tax payments while protecting funds for stock, wages and other essentials. It’s a simple way to smooth out short-term pressure and keep operations moving.
Business Development Loan
Take your hospitality business from everyday operation to the next level with a business development loan. With terms of up to 48 months, this type of finance can support everything from staff training and menu development to refurbishments, expansion and improvements that enhance the customer experience.
If none of those feel like the right fit for your restaurant, cafe or other hospitality business, don’t be deterred – we’ve long been known for taking the innovative approach, and can work with you to build a bespoke solution. Explore all of our products here, or get in touch on 0333 014 9000 if you have something more specific in mind.
FAQ’S
Can I get a loan for my restaurant or cafe without affecting my credit score?
White Oak UK offers soft search eligibility checks, which means you can get an idea of what you’ll be able to borrow without it affecting your credit score.
How quickly can my hospitality business receive funding?
Many applications can be reviewed quickly, with some funding decisions made within hours, depending on the application and supporting documentation – the more boxes you tick, the better!
Can my cafe or restaurant get funding for equipment and furniture?
Yes. Asset finance can help businesses in the hospitality sector spread the cost of expensive kitchen equipment, such as fridges and cookers, as well as interior features such as furniture and fixtures.
What is working capital finance for hospitality businesses?
Working capital finance helps businesses manage everyday operational costs such as payroll, stock buying, supplier payments and project delivery expenses.
Why do hospitality businesses choose alternative lenders?
Businesses such as restaurants, cafes and bakeries often choose alternative finance providers because they can offer faster decisions, digital application journeys, flexible underwriting and reduced paperwork compared to traditional banks.
Can invoice finance help my hospitality business?
Yes. Invoice finance helps businesses unlock cash tied up in unpaid invoices, improving cash flow without waiting for customer payments.
What industries within the hospitality sector can apply?
Funding may be available for businesses operating across:
- Cafés
- Restaurants
- Bakeries
- Pubs
- Bars
- Hotels
- Guest houses
- Bed and breakfasts
- Hostels
- Resorts
- Catering companies
- Coffee shops
- Food trucks
- Takeaways
- Event venues
- Banqueting halls
- Nightclubs
- Spas and wellness centres
- Golf clubs
- Leisure parks
Can funding support recruitment in the hospitality sector?
Yes. Recruitment is one of the biggest challenges faced by the hospitality sector right now, and so businesses can turn to loans and finance to help them secure the best staff.
Are hospitality business loans secured or unsecured?
Funding options vary depending on the product, borrowing amount and business profile. Some business loans may be unsecured, while others may require security.
What documents are required for a hospitality business loan?
Businesses may be asked to provide bank statements, filed accounts, management accounts, identification documents and information about the funding requirement.
What makes White Oak UK different from traditional banks?
White Oak UK offers streamlined applications, soft search eligibility checks, faster decision-making and flexible funding solutions designed for established UK SMEs.
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