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Hospitality and Catering Industry Finance

Getting finance within the hospitality and catering industries is crucial for keeping businesses lucrative, but it can be hard to secure it. Whether it’s a hotel, restaurant, bar, or events company, each face similar challenges when it comes to cash flow and finance difficulty.

hospitality and catering industry finance - catering employee producing a meal

Financial challenges facing the hospitality and catering industry

Specialist premises

Getting the right location for your hospitality business – hotel or restaurant or events spaces or just the office to run operations from – is key. Hotels require premises with space enough to have enough rooms, to have special facilities to offer guests. Getting funding via the usual method of bank lending isn’t always an option when attempting to purchase premises, so getting a mortgage that suits your business can be tricky.

Large expensive equipment

Restaurants and caterers, for example, will need to purchase expensive kitchen equipment such as industrial freezers, cookers, and dishwashers, and enough front-of-house furniture for the customers expected in the case of the restaurant.

Many hotels now also offer gym or spa facilities, as well as the usual restaurant and bar amenities, which are expensive to buy and maintain.

Seasonal dips

After the rush of high season, finances can be stretched tight during off-peak periods. The same bills and expenses have to be paid whatever time of year, so this dip can have a detrimental effect on the day-to-day running of any hospitality based business. Not only that, but if you do already have some kind of funding facility in progress, you may struggle to meet any repayments during those low seasons. Touch can match you with a lender who understands these struggles and who can help you accordingly.

Finding skilled workers

Bridging the skills gap and getting the right workers in is a challenge for any industry. One as wide ranging as hospitality means there are more specialist roles that require a very specific skillset. Due to demand, this can mean that wage brackets can be pushed higher by those who do match the skills, putting added financial pressure on businesses looking to hire.

Licensing costs

Particularly if your business intends to sell alcohol, there are licenses you must purchase before being able to do so. There are also licenses required if you intend to provide refreshments late at night (applicable to cafes open past a certain hour) or any kind of regulated entertainment (i.e. events that require purchase of a ticket or entry costs, or for crowds over 500 strong).


Even for a business – like a restaurant, for example – that is lucrative and in no financial trouble day-to-day, expanding reach and turning that business into a franchise is a big expense. There’s the extra cost of acquiring premises again, more equipment, more staff and new licenses.

Alternative financing solutions for hospitality and catering

Invoice finance

Do away with lengthy payment terms with invoice financing. Receive up to 100% of the cash owed to you from your customers and use it to keep your business moving forward. Invoice factoring or invoice discounting are the two types of financing, and Touch can help you find a lender to provide the funding you deserve for your business.

Merchant cash advance

One of the most common methods of payment, particularly for hotels or bars and cafes, is via a card machine. This means that the businesses are eligible to apply for a merchant cash advance, giving early access to funds they expect to receive as payment for their services over the next month.

Asset finance

Spread the cost of expensive, specialist equipment by using asset finance. Paying a large upfront cost is often not feasible for small or new businesses, so choosing hire purchase (for something you wish to end up owning outright) or finance leasing (for something you’ll only need for a set amount of time and don’t intend to own outright) can ease up the strain on cash flow.

Business loans

A business loan could be the simple solution for helping cash flow for your business. A secured business loan is an amount borrowed against assets you put up for collateral, and defaulting on payments mean that the lender can repossess the asset(s), and an unsecured business loan requires no assets or collateral, but does need a company director to offer a personal guarantee.

Commercial mortgages

A specialist commercial mortgage lender can help you get the most appropriate mortgage for whatever premises you need to purchase for your restaurant, hotel, bar, café or catering business.

Get in touch

If the idea of trying to find a lender to give you the finance you need seems daunting, then Touch can help. For a no-obligation chat about your business requirements and what options are out there for you, give us a call today. As specialised brokers, we can put you in touch with funders who will truly understand the needs of your hospitality or catering company.

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