YHA (England & Wales)
Region: East Midlands
Programme: Coronavirus Large Business Interruption Loan Scheme
Government restrictions introduced in March meant YHA had to close its entire network of youth hostels to guests. To remain operating, the charity had to implement numerous cost-saving measures, but the lack of bookings caused cash reserves to run out. The organisation had no option but to apply to the Coronavirus Large Business Interruption Loan Scheme (CLBILS) for support.
Read what it had to say in this CLBILS case study.
British Business Bank: Can you tell us what your organisation does?
William Howarth, chief financial officer of YHA: YHA (Youth Hostel Association) is a charity whose object is to help young people, especially those with limited means, to learn about, love and care about the countryside and appreciate the cultural values of towns and cities. We do this by providing youth hostels or other accommodation for them when they travel, thus promoting their health, recreation and education.
The coronavirus has affected a huge number of businesses across the UK. What problems were you facing as a result of the outbreak and what made you apply for CLBILS support?
The government restrictions to combat COVID-19 meant we had to shut our complete network of youth hostels back in March. We’re still operating on a restricted basis having reopened at the end of July.
Despite implementing a number of cost-saving measures – including taking advantage of other support available, such as the Government’s furlough scheme – refunding existing bookings and dealing with an ongoing lack of new bookings meant we’ve exhausted our existing cash reserves. The additional funding from CLBILS will support us over the winter period and cover us against a further retightening of restrictions, making sure we can continue to achieve our objectives in the future.
How long did the application process take? Did you need any support?
Discussions on the possibility of accessing CLBILS began at the end of May. We submitted our application and had it approved by the end of June, and the necessary legal work was complete by the first week of September. We had support from HSBC throughout the process.
COVID-19 means we’ve encountered the most challenging period in our 90-year history. The CLBILS funding will be critical to sustaining our operations during this time, and we’re now optimistic that we can continue providing young people with unique and enriching experiences for many more years to come.
William Howarth, chief financial officer of YHA
What advice would you give to other businesses that are applying for a CLBILS loan?
Just that it’s an option businesses should definitely consider. From our point of view, our experience working with HSBC was a positive one.
How has the CLBILS loan helped your organisation to weather the outbreak? And what might have happened if you hadn’t received it?
This year is YHA’s 90th anniversary and we were due to mark it with a year-long programme of celebrations. In stark contrast, COVID-19 means we’ve encountered the most challenging period in our history. The CLBILS funding will be critical to sustaining our operations during this time. As guests begin to return to our properties, we’re optimistic that we can continue providing young people and their families with unique and enriching experiences for many more years to come!
Without the CLBILS loan, we would have run into liquidity issues, which would have meant us having to sell one or more of our hostels to generate cash. This would almost certainly have been below market value and have a knock-on impact on our ability to deliver our charitable object in the future.