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Hospitality businesses are one of the most frequent applicants for revenue-based finance according to SME funder 365 Finance.
According to the company, the UK hospitality sector accounted for £43.7m of funding in 2024, representing a 16.9% increase compared to 2023.
Alongside this, the number of advances 365 Finance approved for the hospitality sector last year increased 20.6% from the previous year.
The average size of advance applied for by SMEs in the hospitality sector is just over £29,000, with 52% of businesses funded in 2024 being repeat customers.
The funder has reported surges in cashflow related funding, stating that this is the reason for 40% of advance applications.
The company believes that this will be further exacerbated by the increases to National Living Wage and employer National Insurance contributions.
The NI rate has jumped from 13.8% to 15% while the threshold has fallen from £9,100 to £5,000. Furthermore, minimum wage has jumped to £12.21 per hour.
Warren Abbey, 365 Finance CEO, said: “It is unsurprising, given all the financial considerations currently weighing heavily on hospitality businesses, that we have specifically seen such an uplift in the number of restaurants opting for the type of revenue-based finance we can offer them.
“It’s a trend which we predict will continue for the remainder of this year, as restaurants once again find themselves having to adapt to difficult economic and market conditions – just as hotels, pubs, and bars are also having to do continually.”
