<
p>An industry lender has commented on the scope of a £300 million leisure fund.
RBS and Natwest have doubled the fee free leisure fund which now rests at £300 million. Its initial £150 million was lent by RBS in just 20 weeks. The fund is available to small and medium-sized leisure businesses.
However, high street banks are seemingly unable to accommodate for all types of businesses, especially the smaller enterprises. Specialist finance lenders like new AOBP Associate Lender Ortus Secured Finance assist in providing for those lacking areas.
The Leisure Fund is only available to businesses with a turnover of more than £2 million. Eligible businesses can draw down between £100,000 to £10 million for up to a five-year term.
While commenting on the fund, Armann Thorvaldsson, Chief Executive of Ortus Secured Finance, praised the success of the fund despite its limits. He said: “It appears that pubs are receiving some funding but the quantum remains very limited. We don’t believe that the fund would provide funding to operators looking to acquire closed pubs and for business without a track record.
“We understand over 260 loans have been agreed since May 2013 and £90 million has gone to hotels. The size of these loans appear to be on average less than £1,000,000 and this could limit the number of potential borrowers.”
When asked about the borrowing behaviour of SMEs, Mr Thorvaldsson said: “Lending in the sector is of great importance to the economy as a whole and one of many key ingredients to kick-starting UK growth.
“The fact that the fund has doubled in size in a short space of time demonstrates how the sector is gaining momentum.”
He added: “Ortus has been very active since its launch in April of this year; we continue to grow our loan book and believe that improving market sentiment towards the sector will assist this.”
Approximately 80 Scottish SMEs have collectively borrowed £32 million from the high street bank leisure fund within five months. This figure implies an average loan size of £400,000, which could be considered as low in size for a business with a minimum turnover of £2 million.
A Scottish business benefitting from the fund included the Fusion Group UK who used the loan to turn Dunblaine’s Old Churches House into a boutique hotel.
It was announced last week at the AGM for the Association of Bridging Professionals that Ortus Secured Finance is the latest to join the AOBP as an Associate Lender.
An industry lender has commented on the scope of a £300 million leisure fund.
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