The hospitality firm not eligible for any of Rishi’s hospitality cash
...and the other small firms fighting to stay afloat but who’ve slipped through the net
BUSINESS owner Justin Gilchrist can appreciate the irony, albeit t hrough grit t ed t eeth. His company, South Catering, is not eligible for any of the Government’s hospitality grants. Before the pandemic hit, the Manchester-based business was one of the leading caterers for corporate launches, conferences and meetings in the North West. Now business is at a standstill.
‘We’re not retail or hospitality enough,’ says Justin. ‘If we were a bar or a restaurant we’d get more help, but we fall through the gaps. A lot of similar businesses to ourselves have already closed.’
Last week, in the wake of the latest lockdown, Chancellor Rishi Sunak announced a new retail, hospitality and leisure grant worth up to £9,000 per property and an additional £594 million discretionary fund. But business leaders warn that many firms will still be left without vital support.
Across the events and hospitality industry, there are thousands of businesses who are falling through the gaps – and missing out on the Government loans and grants.
Mike Cherry, chairman of the Federation of Small Businesses ( FSB), says: ‘ The package announced in recent days just won’t be enough for businesses already on the brink. There remain too many groups who need more financial support to weather this storm.
‘ They include the newly selfemployed, those in supply chains and company directors.
‘Small businesses are the backbone of our economy, and it is vital we support them in every way until the crisis finally begins to ease.’
South Catering had a target to double its turnover last year. But once lockdown began in March ‘business fell off a cliff’.
The firm was deemed too big for a ‘ bounce back’ l oan. Initially rejected for the Coronavirus Business Interruption Loans Scheme, Justin finally secured one with a different lender – although South Catering was rejected for all the business grants (see box, right).
Justin kept the business afloat by furloughing staff, downgrading his planned house purchase and using personal savings.
HE THEN realigned the business to launch wellboxes.co.uk, which sends gifts to staff working from home, including a festive hamper with prosecco and a threecourse Christmas dinner.
It was so successful that Justin shipped tens of thousands of orders in less than three weeks. He says: ‘It’s the only reason I’m still going.’
Ellen Miller has not qualified for any grants because s he only launched her business in October 2019 and doesn’t have business premises.
She set up Leeds Food Tours to follow her passion for food. The business had got off to a great start, but with tours largely out of the question since March last year, Ellen has been forced to mothball the business and instead work in a delivery firm’s call centre.
‘I understand there’s a limit on what the Government can do, but I would have l oved to have got some financial support,’ says Ellen, who i s now busy launching a sustainable clothing company called Daylight Lingerie.
‘A lot of businesses don’t need premises to operate from and I think they’ve been unfairly overlooked by Government.’
Sole trader Kate Tynan had more l uck with grants because she had just moved her wedding cake business – Little Button Bakery – into a studio in Marple, Greater Manchester, when the first lockdown hit.
‘It was supposed to be my best ever year and it turned out to be the worst,’ says Kate. ‘I lost my whole market overnight.’
Kate was able to get the first business grant of £10,000 thanks to having a business studio.
But she didn’t qualify for the SelfEmployed Income Support Scheme. ‘It’s been hard,’ she says. ‘I was lucky to have premises, but many in the wedding business work from home and they don’t qualify for the grants.
‘It’s really frustrating – it’s as if people in Government don’t understand how businesses work.’
Kate says it has been hard to get hold of her council to find out what support is available. While she was able to switch to selling gift boxes at the end of last year, she now has to contend with schools being closed, meaning she is unable to juggle work and home-school her children, aged six and nine.
‘I feel like I’m in limbo and I just don’t know when weddings will get back to normal,’ she says.
Helen Sharland and her husband Dominic will not benefit from the new grants because their bespoke
laser-cut stationery business for weddings and luxury brands – cutture. com – is not considered hospitality.
Helen says: ‘ Our industry has essentially shut down. All our clients cancelled their orders in March last year and we have barely worked since.’
The couple were able to get socalled Coronavirus Bounce Back Loans to keep going as well as business rates relief on their small premises in Bedford. Their other company – onthemantel. com – focuses on promoting positive mental health.
‘We are putting everything into that now,’ says Helen. ‘But it feels like the events industry has just been brushed under the carpet. It needs to have the same level of support as the hospitality industry.’
The FSB is calling for more targeted help from the Government. This includes the creation of a ‘director’s income support scheme’ – mirroring the self- employed scheme – more help for the recently self-employed, a second round of more inclusive small business cash grants, extending the period before the bounce back loans need to be repaid, and a German-style ‘revenue loss scheme’.
Cherry says: ‘This lockdown is expected to last for some time and even when restrictions ease, many small firms will be unable to function at 100 per cent, if at all.
‘The Government should create a spring economic plan to help firms get through so they can help instigate a vaccine-enabled recovery.’