Well-managed businesses can survive Covid
Good management will ensure that even businesses in the worst-hit sectors can survive Covid, new research has found.
According to the latest Lending Monitor by finance aggregator Funding Xchange, even in challenged sectors such as hospitality and education, there have been some winners.
Seven per cent of hospitality businesses have seen a better performance than before the crisis, and 40 per cent of hospitality businesses have reporting no impact as result of the pandemic.
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Funding Xchange’s co-founder and chief executive Katrin Herrling (pictured) said that all of these businesses are managed by directors who have prudently managed their personal finances and have a good personal credit score.
“The crisis very clearly shows the need for intelligent screening of loan applications to identify attractive lending opportunities,” said Herrling.
“Opportunities can be hidden in a challenged sector such as hospitality, where we are seeing strong performers struggling to access funding. The perception from lenders can be that these are a high-risk sectors – but the story is much more interesting.
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“We are seeing cohorts of strong businesses emerge that have successfully adjusted to the crisis due to strong management. Unfortunately, the government schemes are not seeking to support these businesses.
“As market-based solutions are being re-introduced, we are working with banks and funders in helping them analyse specific opportunities for new lending and managing their existing portfolio. Seeking to build strong, resilient portfolio can be consistent with supporting businesses in the most challenged sectors as they exit the lockdown.”
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