What is financial restructuring and why it applies to you

  • 12th December 2018
  • News
  • Stewart Hindley

Financial restructuring in hospitality businesses sounds like the sort of thing that the Hiltons, Raddissons and Travelodges of this world concern themselves with. However, financial restructuring is something that anyone and everyone who owns a public house, hotel or B&B should know is an option that they could benefit from.

What is financial restructuring?

Financial restructuring within the hospitality industry can refer to any action taken to change the way a business is owned, structured or run, to eliminate financial risk or improve a financial situation.

There are no minimal financial limits to qualify activity as financial restructuring, nor any requisite business size. So, if you are a B&B, a boutique hotel, a public house or even a global chain of hotels, you could be involved in a financial restructure.

So how can financial restructuring help my hospitality business?

Financial restructuring can help to provide cash flow  to cover VAT arrears, a liquidity shortfall or a credit rating downgrade.

Whilst financial restructuring is often used, when under duress, to escape a sticky situation, not all financial restructuring is compulsory. It can also be used to reinvest in a business.

A financial restructure doesn’t have to be limited to providing funds for your existing business: it could be a good way to expand your business empire by buying a new business or new premises.

What sort of activities constitute a financial restructure?

Financial restructuring of your hospitality business could include re-mortgaging to consolidate debt, downsizing your workforce, or even restructuring the ownership or management of a business.

Stewart Hindley & Partners is an independent, whole-of-market finance broker which means we can find the most cost-effective way to re-finance or release capital for your business. Our specialists in business funding and business recovery can help you find the right products and ensure your application for finance is successful.

As many loan providers require business plans, marketing plans, and cash-flow projections, we can work alongside the accountancy arm of our business to help guide you through compiling the information you have, or the materials you need to present, to give you the very best chance of success at securing your hospitality finance.

For advice on financial restructuring for your hospitality business, speak to one of knowledgeable advisors today on 01488 393049.

Stewart Hindley

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