New Equipment Finance is aiming to help the hospitality industry become educated on finance options in a marketplace that’s never been designed to benefit businesses. We caught up with the company’s co-founders to find out how.
Starting a business requires a massive investment in your time and money, and – as we’ve seen this year in particular – there’s always risk involved. Opening a venue in the hospitality industry is particularly tough, and owners can struggle to get manageable loans at the best of times in an industry that banks see as high risk.
There aren’t a large number of finance options available to hospitality business owners. Banks tend to steer clear of what they see as a high-risk industry, and there are only a handful of financing companies in Australia.
Aside from lockdown restrictions, unmanageable loans, a lack of options and thin margins can all hold hospitality businesses back. Recognising this problem, successful restaurateur Danny Colls (Hawthorn Common, Silo partnered with self-confessed “frustrated restaurateur” and finance expert Malcolm Colless to launch New Equipment Finance, a hospitality finance company aiming to educate owners and benefit businesses to ensure the Australian hospitality landscape can flourish again as soon as it’s able.
“To be blunt, the industry is in a really tough spot,” says Colls. “When we’re looking at finance, we need to change the industry, we need to be in the business of what we’re doing. Then everybody survives.”
Colls says tight margins and a lack of options exacerbate a vicious financial cycle in the hospitality industry, with owners taking on unmanageable loans and missing out on education on what’s best for their business.
“Margins are getting tighter, customer expectations are getting higher. It’s time for change, and that change is stimulated by options,” he says. “We’re trying to give businesses a more transparent option.”
New Equipment Finance (NEF) is the duo’s method of giving back to a community they’ve been invested in for decades, as owners and customers. Colless says changing the conversation and practice around finance is a necessary step, now more than ever, to save a vibrant but struggling industry.
“This is like climate change in the hospitality industry. If we don’t do something now, there won’t be an industry left to help. It’s not sustainable,” he says. “If we keep going this way, more and more businesses will close because they can’t service the debts they’ve signed up for.”
Despite this somewhat dire warning, Colless remains positive about the state of the industry and says there’s plenty of opportunity for businesses and finance companies to turn things around in the coming months as coronavirus restrictions ease.
“If you’re servicing an industry, what should be your number one priority? To make sure that industry is around to service at all,” he says. “We don’t care if businesses finance through us, we really don’t. Our biggest thing is to let people know there are other options. We need the industry to rise up!”
NEF prides itself on offering quick terms, with turnaround in hours instead of days. Businesses who are interested can reach out here.
Photography: Kristoffer Paulsen