- Hospitality Industry Urges Loan Program Modification: Industry leaders call for changes to emergency loan programs
- Repayment Terms Extension Needed: Request to collaborate with British Business Bank to extend CBILS repayment terms
- Energy Costs Exacerbate Financial Struggles: Energy crisis and high costs threaten viability of businesses
Kate Nicholls advised Kemi Badenoch to adjust a critical firm loans arrangement with the British company Bank during the pandemic.
Hospitality industry representatives want commerce secretary Kemi Badenoch to change pandemic emergency loan programmes to support firms.
Kate Nicholls, chief executive of UK Hospitality, implored Ms. Badenoch to collaborate with the British Business Bank (BBB) on extending the repayment terms of the Coronavirus Business Interruption Loan Scheme (CBILS).
Ms. Nicholls said her members needed such support since many were locked into expensive multi-year energy supplier contracts.
She cited research indicating that nearly a third of UK Hospitality members feared bankruptcy in the coming year, with the vast majority attributing this concern to their energy costs.
Ms. Nicholls wrote that this issue is exacerbated by a dearth of cash flow caused by Covid-related debts.
A significant number of businesses are still repaying bounceback loans and Coronavirus Business Interruption Loans (CBILs). Where interest rates on repayments have increased to between 8 and 10 percent.
HMRC’s inflexibility on Time To Pay concessions also hurts some businesses.
Ms. Nicholls emphasized that participating institutions are not permitted to extend CBILs repayment terms except in exceptional circumstances and that doing so would result in a negative impact on the company’s credit rating.
The UKH chief urged the business secretary to collaborate with the BBB to revise the conditions for the extension of CBILS loans, “with a presumption in favor of extension for businesses adversely affected by the energy crisis in the short term.”
Ms. Nicholls stated that this should not affect a company’s credit rating as it is a standard refinancing.
“In addition, HMRC should be advised to adopt a more lenient approach to Time To Pay (TTP)”.
Despite showing their cash flow and temporary liquidity crisis, viable enterprises were denied TTP.
This is primarily the result of energy providers requiring excessive deposits and others being sluggish to return deposits.
UK Hospitality warned that many firms are under pressure despite recent wholesale petrol price drops and lower residential energy expenses.
A new financial industry charter negotiated by chancellor Jeremy Hunt has helped mortgage customers in recent weeks.
Ms. Nicholls wrote: “An additional measure to support businesses at this time would be to extend the guidance the chancellor gave to banks regarding mortgages with no-fault payment delays to business customers.”
These issues are crucial to the survival of thousands of hospitality-sector enterprises.
