Ravi Gupta of Hustyns Hotel and Spa believes that a £1.18million loan from Fiduciam, the institutionally funded short-term lender to SMEs and entrepreneurs, will secure the Cornwall business’s future for the next two years.
Gupta was speaking after the loan, which falls under the Coronavirus Business Interruption Loan Scheme (CBILS), was put in place to enable the hotel to continue operating until the end of 2022.
The loan comes following a challenging 2020, very much a year of contrast at Hustyns Hotel and Spa in Wadebridge. After closing for three months during the lockdown, it reopened in July to experience its highest demand for rooms in recent years, only to be impacted once more by this second national lockdown.
Fiduciam’s loan provides the business with secure commercial funding for 24 months. Financing costs have been reduced thanks to CBILS, and the absence of early repayment charges gives the borrower added flexibility.
“COVID-19 has posed unique challenges to the hospitality industry - it’s been a real year of volatility. 2020 was expected to be a significant year as we had invested in the hotel with a refurbished restaurant and a new ‘glamping’ offering coming on stream.
"We know that we have a good business model and strong demand but after strong revenue and profit growth in 2019, the lockdown meant we experienced a difficult spring and early summer 2020 when we couldn’t let out rooms or lodges. Once the lockdown was lifted, we had to immediately scale up operations and staff levels for full occupancy.
"The loan from Fiduciam means that we cannot only weather this latest lockdown, but we can make the investments we want to into our resort and know that our business’s future is secure for the next two years.”
Marc Morris, Underwriter at Fiduciam, pointed out that Hustyns was the perfect fit for our CBILS offering. He added:
"Pre-COVID the hotel was performing well and deleveraging. The CBILS loan provides 12 months of space for Hustyns to maintain resilience and rebuild its accounts before the borrower returns to servicing interest. In the medium term, the borrower plans to refinance onto a term product.”
Fiduciam has been accredited by the British Business Bank to offer loans under the CBILS. Delivered through British Business Bank accredited lenders, CBILS is designed to support the continued provision of finance to the UK’s smaller businesses during the Covid-19 outbreak. The scheme allows lenders to provide facilities of up to £5million to smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
Fiduciam believes that all economic downturns cause significant economic scarring in addition to any structural change. Short-term liquidity problems faced by even the best placed firms can quickly become solvency concerns, particularly as the result of an asymmetric shock such as a pandemic. Within this setting, Fiduciam says it continues to see pro-active businesses seek robust provision for their liquidity requirements over a 12- to 24-month time horizon.