Like many great ideas it all starts with a glass of wine and some scribbled notes on a napkin, the exact location for the start of this story was Paul Ainsworth’s Rojano’s in Padstow in June 2018.
Since our launch in 2015 Finance Kitchen has always acted as a broker for asset finance especially for the fit out and refurbishment of restaurants. What this experience has taught us is that many banks and lenders talk a good game in support of the hospitality sector, but the truth is somewhat different. Those lenders who are supportive are generalists so do not have the specific expertise nor do they seek expert opinion. All this adds up to a picture of a massively important sector in the UK economy very poorly served by the lending fraternity.
Back to Padstow, we decided that day that we would launch a Hospitality friendly lender. Since then, there have been several twists and turns and external events such as uncertainty around Brexit and then Covid that made us feel that the time wasn’t right.
As we survey the post-Covid landscape things have certainly not improved in fact, lenders have a host of legacy issues around forbearance and potential restaurant closures. It’s going to take time for things to work through and confidence to return.
We therefore feel we have the perfect opportunity. We are already seeing a number of ambitious founder’s keen to grab sites at rents that were unthinkable 18 months ago, the issue then becomes who is going to fund these projects?
We have also learned an awful lot about the sector in these past 6 years and have a far better grasp of what a financial product might look like that ideally fits the needs of business in the sector. As an example, today there are huge tensions between contractors and founders over stage payments as lenders either can’t or won’t get involved in any finance transaction until everything is in and operational, we have a solution to this.
Behind Finance Kitchen we have Asset Finance experience that goes back to 1980’s which includes the setting up and management of a number of new start lenders. We understand that to put together a lending business you need a number of constituent parts, a slick receivables and collection systems, loan documentation, credit, risk and operational know how, regulatory authority and most importantly money to lend and customers to lend to. We are already in advanced talks with professional partners to plug in to our model.
At this stage we are no more than sharing our plans with you as part of the hospitality community. There will certainly be opportunities to get involved whether that is a user or supporter of our services or as an investor in our loan book.
As the sector emerges from this terrible crisis, its going to need real help and support and we feel we are in a great position to contribute.
If you would like to know more about our plans please don’t hesitate to contact us.