We are yet to see the true economic fallout of 2020 due to the COVID-19 pandemic and consequent multiple lockdowns in the UK. However, there is no denying that the hospitality and retail sectors have taken massive hits due to full or part closures for nearly a year now.
These sectors are entirely reliant on support from face-to-face interactions with customers coming their doors. With several months of extended lockdown restrictions, these doors have been closed.
The government has faced scrutiny for their handling of the lockdown restrictions, have continually vowed their commitments to these sectors. They still cannot however save every job – this is just not viable.
The success of the UK’s vaccine rollout certainly can’t come sooner for the hospitality sector.
Mainstream lenders are essentially unable to provide the much-needed support to these sectors in the short-term time scales, and this is where the opportunity could come in for bridging finance to offer these groups an economic lifeline.
Private bridging loan lenders have seen a significant increase in the number of enquiries from hotel and restaurant owners seeking short-term finance to support future growth once restrictions are lifted and the economy reopens up. There is of course the challenge of assessing a viable exit route, especially in instances where there might be little prospects of income being generated in the short to medium term.
The success of the pace of the vaccine rollout has certainly increased confidence that the end of 2021 will be very different. For exit plans that are centred around two-year loan terms, there is hope that the business receiving the loan will be back on its feet by the end of this given time period.
Further, with restrictions having kept customers away from shops and hospitality outlets for such a long and fragmented time, there are no doubts that demand will soar once they return to open this summer.
With a decline in demand for large office spaces and growth in home offices, this is likely to open up new opportunities for property investors and developers who are looking to convert office spaces into residential spaces in central locations – finding a middle ground between those working from both home and in the field. These conversions are likely to have dual benefits, addressing the ongoing housing shortage in the UK, as well as making profitable use of empty spaces on the high street that otherwise become derelict.
While we have certainly not come out of the other side of this struggle against the COVID-19 pandemic, the start of 2021 has seen positive signs for the UK economy in terms of both new opportunities and investments.
Flexibility will be paramount for these opportunities to follow through successfully. This involves brokers and master brokers working closely together with lenders so that they can move quickly as well as agreeing on an exit strategy or route.