New grants for insulation provide boost for small builders, says FMB

In response to reports that tomorrow the Chancellor will announce a package of measures to improve the energy efficiency of our leaky homes and buildings, including £5,000 vouchers for homeowners to carry out insulation and other retrofit measures, Brian Berry, Chief Executive of the Federation of Master Builders (FMB) said: “This is very good news, signalling both an important step towards building back better and greener, and a vote of confidence for local builders up and down the country. This will protect jobs in construction, and create new opportunities. We must ensure that all the new entrants to the industry receive proper training or apprenticeships, to guarantee that energy efficiency home improvements are delivered by quality tradespeople.

Berry concluded: “To secure local growth and level-up across the country, local builders are ideally placed to deliver the work and the scheme must be accessible to small and medium-sized firms (SMEs). The FMB has been calling for a national retrofit strategy and this step today will help give the boost to consumer confidence that will be needed. We will push for additional steps such as the development of green finance to support the further development of the strategy, and for the full £9.2 billion pledged in the manifesto to be brought forward. We hope in his statement tomorrow, the Chancellor gives added support to the sector with a temporary cut in VAT, support for apprenticeship delivery, and SME house builders.”

BFS Corporate team make £40m of new funding available in June

Independent invoice financier, Bibby Financial Services (BFS), provided £40m in new funding facilities to corporate businesses throughout June as it continues to grow its support for larger SMEs.

In a record month, BFS’s Corporate team structured several high profile transactions, including a £9m refinance package for Currie European Transport Ltd, a transport and storage solutions group, and a £4m invoice discounting facility for a £54m turnover healthcare and environmental hygiene business.

BFS Corporate Sales Director, Ben Smith said: “The Corporate team had a fantastic month in June and we have a strong pipeline of new business for July and August. These record results demonstrate that we’re not only ‘‘open for business’’, but that we’re doing business and hungry to do more to support UK PLC.

“Corporate clients tell us they welcome finance solutions that offer an alternative to loans, enabling them to unlock working capital from within their businesses, without having to take on further term debt. This alternative is exactly what our invoice finance and ABL facilities offer, which is now more important than ever as the economy begins its road to recovery following lockdown.”

Formed in 2013, BFS’s Corporate team is responsible for structuring funding facilities for business with turnover between £5m and £100m across a range of Asset Based Lending solutions. The team helps businesses to unlock working capital for a range of scenarios, including cashflow funding, new equipment purchase, growth and expansion, management buy ins and buy outs, refinancing, corporate restructuring and mergers and acquisitions.

UK CEO at BFS, Edward Winterton, commented: “During this challenging economic period businesses need to be able to access funding for growth. Our Corporate team is a vital resource for business owners searching for funding directly, through their accountants, advisory professions and other intermediaries looking to help their clients grow.

“We have developed our corporate capability significantly in recent years to include Stock Finance, Foreign Exchange, cash flow lending and Asset Finance. This allows our clients to unlock the working capital they need under one roof so they can grow in domestic and international markets, both now and in the future.”

Duff & Phelps secures future for Vapiano (“the Company”)

Vapiano, the restaurant chain which offers pizza, pasta and salads at seven locations across the UK has been rescued following the appointment of Allan Graham and Matthew Ingram of Duff & Phelps as Administrators. The appointment and subsequent sale of four of the seven sites was concluded as a result of a pre-pack administration that took place on 6 July 2020.

The Company was a subsidiary of the German restaurant franchise company headquartered in Cologne, Vapiano SE which was first established in 2002. The group’s restaurants make handcrafted pasta and freshly made pizza dough on site daily. These are served alongside salads, sauces, dressings, and pesto which are all prepared in-house and guaranteed to be made of the finest ingredients. The restaurants are set in iconic landmark locations and offer fast casual dining in a welcoming environment with a relaxed ambience.

On appointment, the Administrators concluded two transactions, the sale of three restaurants in London to UK VAP Limited, a subsidiary of LOVE & Food Restaurant Holding, and a further site in Manchester to Naveen Handa of the Cairn Hotel Group, which is operated by the Handa family. The transactions secure the future of 209 jobs.

LOVE & Food Restaurant Holding itself was established as a purchasing vehicle for a consortium of investors led by a former shareholder and director, Mario C Bauer, which purchased the Vapiano brand and franchising rights from Vapiano SE. Under the terms of the agreement, The Handa family’s purchasing vehicle, Minhoco 56 Limited will enter a franchise agreement with LOVE & Food Restaurant Holding to operate the restaurant and are looking to open further sites across the UK.

Allan Graham, Administrator, Duff & Phelps, stated: “We are delighted that we have been able to secure the future of this High Street favourite in what are the most extraordinary times for the leisure and hospitality sector.”

Vijay Merchant, Senior Director, Duff & Phelps added: “The collapse into Administration of the parent company in Germany put the spotlight on the UK operation, but its successful sale to an investors group has enabled us to rescue the majority of the UK based sites in what has been a great outcome for the Company, its employees and the High Street.”

The announcement follows the sale of Vapiano SE and its subsidiaries in Germany to a consortium led by Mario C. Bauer, who took over the business in a mixed asset/share deal for a total purchase price of EUR 15 million. The transaction included 30 restaurants operated by Vapiano in Germany.

UK Country Director Craig Goslin and the existing Vapiano UK management team will remain in place to support the corporate restaurants and franchise network and drive future growth in the UK.

Goslin added: “At the core of the Vapiano UK business is the incredible group of dedicated and passionate people that make up our management and restaurant teams. Whilst sadly not all of our people will be continuing the journey with us, I am grateful, particularly during these unprecedented times, that we’ve been able to secure the future of Vapiano UK and many of our people. I look forward to leading the team on the exciting next chapter of the Vapiano UK story, whilst delivering shareholder value for our investors and our franchise partners.”

New survey shows over 60% of small businesses using tech to survive Covid-19

According to new research from the Centre for Policy Studies, 22% of SMEs still don’t use digital platforms, such as Google, Facebook and LinkedIn, or software for digital accounting, HR, and customer relationship management, in their daily operations.

This is despite over three-fifths (61%) of those that do agreeing that technology and digital platforms have helped their business to expand, and almost half (49%) saying it has allowed their businesses to compete more effectively against larger brands.

Reaching new audiences’ was the single main reason why SMEs use digital platforms (chosen by 29% of respondents), followed by ‘interacting with customers’ (18%), ‘handling financial data’ (15%) and ‘low-cost advertising’ (13%).

A new report by the CPS, the leading centre-right think tank, shows that technology and digital platforms have been crucial in boosting the performance and productivity of businesses. This is especially true for small and medium sized businesses (SMEs), which now account for 99.8% of all businesses in the UK. However, it warns that Britain is still not making the most of this opportunity – not least because of a failure to understand the full economic impact of the digital revolution.

The report, which will be launched today by the Minister for Small Business, Paul Scully MP, contains new polling and results of focus groups of SME owners and senior managers, carried out in the wake of the pandemic. The polling, by YouGov, shows that three-fifths (62%) of SMEs agree that without digital platforms, it would have been harder for them to operate during the pandemic, and 36 per cent now view digital platforms more favourably than before the lockdown.

Demonstrating the increased digitisation of our economy, the value of e-commerce sales in the UK non-financial sector have increased by nearly 60% since 2009, and stood at around £688 billion in 2018. Amazon claims that SMEs using its platform achieved total export sales in excess of £2 billion in 2018.

‘Platforms for Growth’, written by CPS Business Researcher Eamonn Ives, argues that most SMEs rightly see the digital revolution as a net positive, and that the Government needs to ensure that the ‘long tail’ of less productive firms can take full advantage of the opportunities it offers. The report, supported by Facebook, is part of the CPS’s ‘Going for Growth’ series, which explores how Government can help businesses to drive the post-Covid recovery.

It calls for an urgent review of the Apprenticeship Levy to ensure employers use funds to invest in digital training that will deliver recognised productivity benefits for their businesses. Introducing tax breaks for self-funded training would also encourage more people to improve their digital literacy skills.

To improve digital infrastructure, the report also highlights the need for flexibility around the height and width of 5G masts to increase connectivity, as well as a comprehensive new cyber security strategy to take effect after 2021 to provide reassurance for those who operate online.

CPS Business Researcher, and report author, Eamonn Ives, said: “New digital technologies should be embraced and allowed to flourish. We should be led by the evidence when it comes to their impact on Britain’s SMEs, which shows how they can bolster productivity, and will be vital for the UK’s economic recovery after lockdown.

“Our recommendations aim to ensure that digital technologies remain an overwhelming force for good in the workplace, and allow the country’s ecosystem of SMEs to grow, take on new staff, and thrive as the dynamic businesses they can be.”

Steve Hatch, VP for Northern Europe at Facebook, said: “Technology has played a significant role in helping SMEs break down the many barriers to entry that would have existed just a decade ago. Technology has levelled the playing field and SMEs can now reach new customers and markets at a fraction of the cost enabling them to reemerge and thrive following the impact of Covid-19.

“Facebook provides 160m business globally with free tools and advertising solutions that enable them to reach new customers, grow market share and ultimately create jobs. It is clear there is much more to be done to accelerate the digital transformation of many UK SMEs and we look forward to helping them achieve their goals.”

Ultimate Finance adds Bridging Finance to its accreditation by the British Business Bank for Coronavirus Business Interruption Loan Scheme (CBILS)

Specialist asset-based lender Ultimate Finance is today announcing that it can offer Coronavirus Business Interruption Loan Scheme (CBILS) backed Bridging Finance products, following earlier accreditation by the British Business Bank for Term Loans alongside Invoice Finance facilities and Asset Finance.

Property lending has been significantly impacted by the COVID-19 outbreak with the supply of finance severely limited and the ability to repay facilities through the sale of property restricted because of the property market freeze in place during March, April and part of May, with uncertain market conditions expected to persist for some time to come.

Ultimate Finance’s CBILS-backed Bridging Loans secured against residential properties are available from £100,000 to £2.5million with an LTV up to 75%, with fixed repayments and no interest or lender-levied fees paid within the first 12 months.

The company currently works with more than 2,500 businesses across the UK and expects to be operationally ready to begin taking new applications via its approved broker partners from later this week.

Josh Levy, CEO, Ultimate Finance, says: “Bridging Finance is a significant and vital source of capital to the overall UK property market, and as a proposition provides the short-term finance that many borrowers require to buy themselves time to either sell properties or secure long-term permanent finance. Our CBILS facilities will enable SMEs to complete projects and have breathing space without the pressure of a looming repayment date.”

Liam Cavanagh, Head of Bridging Finance, Ultimate Finance, says: “With CBILS accreditation, we will go beyond our normal credit criteria to fill the funding void caused by market conditions. Our offering prioritises speed and flexibility, enabling the quick provision of capital to make up for reduced lending appetite elsewhere and allowing developers, housebuilders and buy-to-let investors to have a refinancing source away from existing facilities that have reached their repayment date.”

Asset finance market falls by 60% in May 2020

New figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) fell by 60% in May 2020 compared with the same month in 2019. In the five months to May 2020, new business fell by 30% compared with the same period in 2019.

New business in the commercial vehicle finance and business new car finance sectors contracted by 62% and 87% respectively, compared with May 2019. Over the same period, the business equipment finance and plant and machinery finance sectors reported falls in new business of 40% and 44% respectively. By contrast, the IT equipment finance sector reported a modest fall in new business of 4% in May.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The asset finance market reported its lowest level of new business for more than 13 years in May, with the vehicle finance sectors continuing to be hardest hit by the lockdown restrictions. The IT equipment finance sector was the only sector to report growth in the first five months of 2020.

“Our latest figures show that the industry provided finance for almost 40% of UK investment in machinery, equipment and purchased software in the year to March 2020. If this support for business investment is to continue as well as meeting the huge demand for forbearance, the Government needs to take action to support all lenders, including non-bank lenders, by allowing them to access to funding as suggested in the FLA’s Term Funding Pipeline proposal.”

Nucleus Commercial Finance becomes latest fintech lender to support SMEs through the Coronavirus Business Interruption Loan Scheme

Nucleus Commercial Finance has today been accredited by the British Business Bank as a lender under the government-backed Coronavirus Business Interruption Loan Scheme (CBILS).

Nucleus Commercial Finance joins the scheme, which enables the business to provide loans from £50,001 to £5m for SMEs seeking financial support as a result of the COVID-19 pandemic.

Within a week, Nucleus will start accepting applications from brokers via their one-of-a-kind myNucleus portal. Subject to the information received, Nucleus will be able to provide the broker with a decision, send legal documents within minutes and fund the same day. The lender will also be taking applications directly from customers.

With industry leading technology at the heart of their approval process, Nucleus will be able to provide CBILs funding to businesses within 24 hours of application, giving UK SMEs access to quick and flexible finance at a time when they need it most.

Under CBILS, the first 12 months of interest on the facility and any arrangement fees will be paid by the UK government as a Business Interruption Payment.

Chirag Shah, CEO, Nucleus Commercial Finance, said: “It’s essential right now that businesses get the finance they need when they need it most, which is why I’m proud that Nucleus Commercial Finance is supporting SMEs through the Coronavirus Business Interruption Loan Scheme. Over the last 18 months we have invested significantly in technology, including automated underwriting – our industry-leading system will allow us to process CBILS applications and deliver funds to businesses within hours at a time when traditional banks and other alternative lenders are struggling to keep up.”

Fleet Mortgages’ Q2 Rental Barometer reveals only a ‘slight softening’ in rental yield

Fleet Mortgages, the buy-to-let specialist lender, has today launched the second iteration of its Buy-to-Let Rental Barometer covering Q2 rental yields across England.

The regional snapshot covers all the areas in which Fleet lends in England and highlights the rental yield changes that have occurred in each region. In this iteration, the yearly comparison is between Q2 2020 and Q2 2019.

Overall, the Barometer shows rental yields on residential buy-to-let properties of 5.3% across England, easing down 0.4% from 5.6% achieved in the second quarter of 2019. The North West of England posted the top rental yield regional figure for the quarter, up 0.6% year-on-year to 7.6%, while the East Midlands posted the biggest year-on-year fall of 2.1% down to a 4.4% yield from 6.5% last year.

Whereas Fleet Mortgages’ first iteration of the Buy-to-Let Rental Barometer – covering Q4 2019, compared to Q4 2018 – showed only one region – the North West – with a drop in rental yield over the period, this time there have been over 1% falls in the North, Yorkshire & Humberside, and East Midlands, with smaller falls posted in the South West, East Anglia and Greater London.

The three regions to post positive rental yields over the period are the North West, West Midlands and the South East.

Fleet said that the overall data represented softer rental yields across England but with little signs of immediate falls.

It did however suggest caution was required in terms of predicting future rental yield levels as valuers had only been valuing physical properties for just over five weeks – since the easing of the lockdown restrictions in England – and Government intervention in the form of furlough support, and the current moratorium on evictions, may mean the full extent of the impact of COVID-19 pandemic on rental demand and yield is not yet visible.

The Q2 figures do not include Wales as different lockdown rules applies and no meaningful data is available to provide a robust rental yield figure.

Steve Cox, Distribution Director of Fleet Mortgages, commented: “While we are very early into the post-lockdown ‘new normal’ the latest iteration of our Quarterly research appears to show a more promising picture for rental yield, than some might have predicted, with what we might describe as only a slight softening compared to the previous year.

“The economic backdrop may appear somewhat bleak at present, but this might change quickly depending on the type of recovery we get, and certainly at the moment our latest figures do not suggest sharp falls in rental yield. This may well be as a result of pent-up demand and more households being formed as a result of the lockdown, but it’s clear that more data will be required and it will be interesting to see whether this trend will be maintained into the rest of the year.

“Clearly, we will need to take into account the tailing-off of the furlough scheme and how this impacts on the level of unemployment in the country, the ability of existing tenants to keep paying their rent, and the re-introduction of evictions and repossessions at the end of the year, to get a clearer picture of where rents and yields are heading.

“What we do know, as a result of our experience through the Credit Crunch and the recession that followed, is rents are not as susceptible to these economic hits as property prices. Occupants are much more likely to opt for shorter-term financial commitments offered by renting in such circumstances, rather than move to longer-term property ownership.

“That being the case, and while the rental market outlook has undoubtedly weakened, we are hopeful that tenant demand will be maintained and even strengthen, and that with a relative shortage of properties to choose from, this will ensure rental levels and yield improve.

“At Fleet we are certainly seeing growing levels of interest from professional landlords adding to portfolios and that borrower demographic appears even more committed to property investment, which is good news for advisers active in this space.”

HMRC business loan stats further proof of the struggles for small businesses

Robert Marshall, Managing Director of WorkLife, a digital employee benefits platform that provides free financial advice to workers, says “With over £11bn being lent to more than 50,000 smaller businesses through the government’s CBIL scheme, it’s further proof of just what a dire state many of the UK’s businesses are in as they struggle to survive the pandemic and subsequent lockdown. This is on top of the of the extra £18.2bn in borrowing by SMEs revealed by the Bank of England yesterday. This is a life and death moment for many firms that have been hit particularly hard by the ongoing restrictions.

“But we mustn’t forget the knock-on impact this has had for workers; the millions of British employees who have been furloughed or had their salaries or hours cut, and now face their own financial crisis.

“As the lockdown begins to loosen, it is important to remember that both businesses and their employees need support to manage any financial shocks and help them recover. In the meantime, anyone struggling should visit websites like the Money and Pensions Service for clear and helpful guidance on options available to them.”

High-Profile Commercial Property Wins Boost Landwood Group

Landwood Group’s Commercial Asset Management division in Manchester has bucked the trend of a Covid-19 downturn with a raft of high profile new instructions.

The new business wins stretch across the team’s full range of property management disciplines, including service charge work, rent reviews, lease renewals and facilities management.

Highlights include a new instruction with Landwood appointed by Cervidae to manage its One Didsbury Point development. The 60,000 sq. ft, four storey, Grade A office development sits on Princess Parkway, one of the main arterial routes into Manchester, with close links to Manchester Airport, M56 and M60.

At present, it is occupied by Optegra, Carrier Travel, Bouygues and IBI Group.

Landwood Group’s Commercial Asset Management team, led by Director Anna Main, will deliver a full facilities and property management service to the building.

At the same time, a North West-based high net worth individual has instructed Landwood to manage his portfolio of six property assets across the UK, with a total footprint of 150,000 sq. ft.

In London, the Cashlong Group has instructed Landwood to carry out rent reviews and lease renewals on its properties.

Anna Main says: “At this time more than ever, businesses are looking for hands on property management services, from experienced, director-led teams. It’s been particularly pleasing that even in a period of unprecedented uncertainty, demand remains high.

“Like every business, we’ve had to pivot and think what we can offer over and above our usual service. The focus is on minimising risk and maximising revenues in the short term, before we assess what the ‘new normal’ looks like later in the year.

“The Landwood Group goes further for our clients and that’s why our client base of high-net worths, property trusts and property owners appreciate a higher level of service.”

Landwood Group’s Manchester-based Commercial Asset Management team enjoyed a strong start to the year before the disruption caused by Coronavirus, with a number of new instructions from clients including Grant Thornton, FRP and Nikal.