Rumours of the catering industry’s
death have been greatly exaggerated by the banks – or so it would
seem from the thousands of solvent small businesses currently
trying, and failing, to make even the most unambitious equipment
purchases through asset finance.
But are brokers missing a hidden and
potentially lucrative market by evacuating catering as a whole?
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
One broker told Leasing Life that the
vast majority of refused leasing applications he saw were from
small, new cafes and delis looking to finance single,
business-critical items such as glass-fronted service counters in
the £1,000 (€1,137) to £3,000 value range.
He also mentioned the example of a Lancashire
restaurant that had made a stable profit for eight years since
inception, but whose owner had been refused asset finance on a
£5,000 oven on the basis of not being a homeowner.
From the perspective of the industry’s captive
funders, the sector doesn’t seem dead at all. Carol Hatten, head of
the leasing business at catering equipment manufacturer Hobart UK,
says that her division has seen an increase in leasing business
since the banks dropped out of the sector.
Hobart Leasing and Finance, which processes
several million pounds of sales-aid business yearly through funding
from American parent ITW, has not seen a significant increase in
arrears this year.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataMeanwhile, another independent funder of
catering equipment told Leasing Life that no more than 10
percent of customers have missed payments over the past six
months.
Also, according to Hatten, many catering
businesses are only now coming to realise that leasing is an option
when purchasing catering equipment, such as washers and cooking
equipment in the £3,000 to £6,000 range.
Hatten added that catering assets are a good
proposition for secondary rental income, with many of Hobart’s
mixers and dishwashers being kept on by companies more than 10
years past the expiration of original lease terms.
Nevertheless, a gaping hole still remains in
the catering finance market, and very few funders seem keen to pick
up the slack. Notable exceptions include Admiral Leasing, which
recently developed a sales-aid partnership with fitted kitchen
provider Vision Commercial Kitchens, and Bibby Leasing, which is
actively seeking new business in the catering sector.
Fred Crawley
