Barry Wise, director, RegBox says his bank has failed to understand why lending money to businesses in the event industry is a ‘sound investment’.
Wise explained that when he first approached his bank, after the government introduced the Covid-19 Business Interruption Loan (CBIL), his bank tried to make him take out a regular loan. He said: “They started by offering me a standard business loan when the Covid-19 lockdown started but because we had some money in the bank they tried to push me into an overdraft facility, at a rate higher than a standard loan.”
Wise, who owns a registration company, say his bank eventually discussed the possibility of CBIL they then asked him to come up with the ‘impossible’.
“The bank asked me to produce three times the amount of paper work than you would have to in normal times and they wanted to know cash-flow predictions. It’s almost impossible to come up with numbers based on this crisis, and I believe it was a tactic to put people off applying because they don’t want to take the risk, and certainly don’t believe our industry is a sound investment.”
Wise was then told that now the government has introduced Bounce Back Loans (BBL), 100 per cent backed by the government, he should apply for that instead. Wise added “As soon as the new BBL came into place they stopped considering giving me any personal support and pushed me towards this.”
“Supplier companies in our industry are a sound investment as we are the lynch pin and without us, you don’t have events. Every business in the UK needs shows to trade face to face which is why we are a great investment. I just wish banks would understand this. We are lucky we saved some money and are able to use the BBL.”
What do the experts say?
Kevin Keck, Partner, Phoenix Equity Partners
“We have been regular investors in the exhibitions sector at Phoenix Equity Partners, having first invested in CloserStill in 2012 and, more recently, in Nineteen Group in late 2018. The exhibitions sector is attractive for a number of reasons, including the importance and value of face-to-face events for both attendees and exhibitors, strong recurring revenues, high margins and consistent growth over many years.
“Clearly, the COVID-19 pandemic has had a material impact on the sector and the businesses within it, as it has across many industries. We believe that exhibitions have an important part to play as the UK and other countries start to loosen lockdown restrictions and seek to restart business activity. It goes without saying that this needs to be done in a responsible way with all available precautions taken to limit the risk at events in the future.
“One final important strength of the sector is the entrepreneurial leadership within it and I know that the leaders within organisers, venues and other associated companies are looking at creative and responsible ways to restart activity at events to help the economy to recover as soon as it is safe to do so.”
Phil Soar, chairman, CloserStill media
“Bankers do have a tendency towards short term memory. I remember after the downturn of 1991, and again after 2008, very few wanted to launch or back exhibitions. But look what happened within just a handful of years – look at the massive sums investors were then prepared to pay for trade show companies. History rarely repeats exactly, but it does rhyme. If you will, bet against the future of an industry which has been at the centre of economies since the Frankfurt and Leipzig fairs first began in 1240: I will happily take the other side of the bet.”
Simon Kimble, chairman, Clarion Events
“The Events industry has been hit hard on many occasions, but the power off Face to Face events always rebound. And intriguingly, always stronger.”
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