Business support gaps exposed as more than half of loans rejected
More than half of business support loans to hospitality firms have been turned down, while only a quarter of operators have received hospitality grants, according to new research.
A survey conducted by UKHospitality has found that 48% of the 378 operators polled – who manage some 21,000 sites and employ 370,000 people – had applied for loans, but the majority (57%) had failed in their application. The rejections were due to government-imposed State Aid rules (26%), while a further 28% had been told to exhaust their own capital first.
UKHospitality is calling on the loan scheme to be extended as only a quarter of businesses are eligible for hospitality grants.
Meanwhile, some 74% had claimed, or intended to claim, for business interruption insurance, but less that 1% had received pay-outs.
However, the Coronavirus Job Retention Scheme has proved successful, with 84% of the sector furloughed and redundancies standing at 2%.
UKHospitality chief executive Kate Nicholls said: "These findings lay bare the extra work that needs to be done by governments, banks and landlords to make sure as many businesses as possible can survive this crisis.
"Hospitality was the first hit, the hardest hit and will suffer for the longest, and government support needs to reflect these facts. Hospitality businesses will be key to recovery as prolific employers, major tax contributors, and hubs for social interaction.
"Governments across the UK have provided unprecedented support to assist hospitality through this crisis, and that is extremely welcome. Yet, we are in this for the long haul. Everyone is rightly looking to how the economy and the industry restarts in a way that avoids a return of this horrific pandemic. Before we get to recovery, we need to make sure that the support measures already announced are getting through to business.
"Loans must be fast-tracked with minimal restrictions, grants must flow to all businesses that need them regardless of size, and the job retention scheme must be amended to reflect actual earnings."
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