A NEW £5m fund has been launched to support the hospitality sector.

The Business Enterprise Fund (BEF) has set up the Hospitality Recovery Loan to provide additional support to hospitality, food, retail and supply chain businesses in York and North Yorkshire, and wider region.

It was launched at an event at Spark:York, hosted by BEF, which welcomed several hospitality company owners and introduced them to the funding.

Trade body UK Hospitality says Covid-19 led the British hospitality sector to lose out on £114.8bn in sales in 2020/21.

Businesses that have not folded have been left facing a loss of income, depleted cash reserves and staff shortages.

With the recent lifting of restrictions, the sector now faces the challenge of returning to pre-pandemic trading levels.

Kevin Hollinrake MP, co-chair of the APPG for Fair Business Banking, was guest speaker at the launch and spoke about the importance of both small and medium-sized businesses and hospitality to the regional and UK economy, highlighting the current funding gaps they face.

“SMEs account for three fifths of the employment and around half of the turnover in the UK private sector, yet they are hugely impacted by a £22bn funding deficit which impedes their growth, vital after the damage Covid-19 has caused,” he said.

“Community development financial institutions like BEF play an important role in addressing this funding gap - and I’m delighted to announce this new funding to support SMEs in the hospitality sector in this region.

"The hospitality sector has been severely impacted by Covid which is why I am pleased the Government has lifted all restrictions in England, thanks to the vaccine rollout. I will continue to work with the sector both in Parliament and locally to ensure they can return to pre-pandemic trading levels."

Ben Fry, of The Potions Cauldron in York, added: "The hospitality recovery loan will have a huge impact on the sector. I would encourage any business looking to push forward to get in touch with BEF. They look at your business, they show interest in your ideas and could give you the cash flow injection that could make all the difference."

Steve Waud, chief executive at BEF, said: "Recovery and growth is vital for this sector, which has suffered more than most over the last two years. We look forward to funding many other hospitality companies in the Yorkshire and Humber region."

Steve Waud, CEO of BEF said: “Recovery and growth is vital for this sector, which has suffered more than most over the last two years. We look forward to funding many other hospitality companies in the Yorkshire, Humber and Tees Valley region.”

The BEF is a not-for-profit social enterprise, set up to provide loans to SME businesses that will help them thrive and grow when other lenders can’t fully assist.