A steakhouse chain with restaurants in England has hit the news after requesting loans from its furloughed staff, based on claims by the GMB union.
It is reported that staff were asked to provide 10% of their wages each month to the business as interest free loans and this was coupled with “a threat of dismissal”.
The request apparently stems from a short-term cashflow issue within the business and has been slammed as “disgraceful” and “immoral and … certainly punitive to the staff”.
This unorthodox funding attempt has hit the news for all the wrong reasons. This steakhouse business is now facing significant internal pressure and external scrutiny. The negative publicity is likely to restrict access to other forms of available rescue finance.
Many businesses are struggling with the impact of Covid-19 on cash flow. Businesses in the restaurant and wider hospitality sector have felt the impact of multiple lockdowns and need to research various ways to access and raise finance, which we would be happy to assist with.
Mills Selig can help.
Having the right legal advice at the right time is crucial. Our expert team offers clear, concise and problem-solving legal advice aimed at accessing finance quickly and effectively.
Please do not hesitate to get in touch with Naomi Gaston in our banking team to discuss.
Editorial prepared by: Naomi Gaston, Senior Associate
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