UK restaurants using bridging loans to stay open
Many UK restaurants are struggling and need loans to stay afloat. According to Companies House data, £192 million of short term loans have been lent by directors of restaurant businesses to keep their restaurants trading.
The directors of Gordon Ramsey Holdings, who own many restaurants, are owed £10.5 million from loans that have provided. Jamie Oliver’s Jamie’s Italian restaurant chain has over £70 million in debt. Other chains, including Strada and Byron, have closed some of their less well-performing restaurants.
Restaurants are also suffering from the higher cost of imported food and wine due to the value of sterling falling against European currencies.
Due to these high-profile restaurants having financial problems, mainstream lenders become wary about providing loans for any restaurant. This has resulted in many directors using their own personal funds to provide bridging loans.
Conrad Ford from Funding Options says that restaurant directors who cannot get loans from high street banks should explore the possibility of raising short term funds from smaller alternative banks. He said:
“It is crucial that directors and owners of businesses that struggle to access bank lending are aware of alternative funding options available to them – instead of having to put their own hard-earned cash back into their businesses.”
Bridging finance brokers can help find loan deals. If a director has a sound business plan for improving a restaurant’s income and owns property for use as loan security, a specialist lender will be willing to consider a bridging loan application.