Four North Staffordshire nurseries are facing a more secure future after the company running them received a £1.6 million bank loan.
Children 1st Day Nurseries saw its revenue plunge in the wake of the lockdown as most families have been looking after their young ones at home during the day.
But staff have continued to care for children of key workers and have suspended nursery fees for parents facing financial hardship during the Covid-19 crisis.
In order to keep services running, the nursery group has negotiated the financial rescue package with Lloyds Bank. It has also been offered a 12-month capital repayment holiday on its existing borrowing.
The company normally educates 4,000 youngsters and employs more than 600 people across its 24 nurseries. But just 15 per cent of the children have been attending sessions in recent weeks.
This is in line with Government guidance that nurseries, like schools, should be closed to most young people during the lockdown.
Managing director Adrian Mason says the knock-on effects have hit cash flow.
He added: “Not only will this new funding mean we can carry on supporting key workers and vulnerable children, it also means that we can retain our amazing teams of employees and ensure the long-term future of the company.”
The Meir Park, Upper Tean and Buckinghams nursery settings have all been rated outstanding by Ofsted. Leek Pre-School’s provision has a good rating.
But like the early years sector as a whole, they have faced a worrying time coping with the fall-out of the national restrictions on businesses.
The Government has agreed to continue issuing funding for two to four-year-olds who would normally have been eligible for free nursery places. But many privately-run nurseries were already subsidising this provision out of their main budgets and have now lost fees income.
A number of nurseries in the region have furloughed staff and others fear their businesses will go to the wall.
Children 1st Day Nurseries secured its bank loan through a brokering arrangement with Goodman Corporate Finance.
Jon Saltinsall, senior healthcare banking consultant at Lloyds Bank, said: “The finance secured by Children 1st will act as a much-needed buffer to the company as it, like many other firms, overcomes unprecedented challenges in the weeks and months ahead.
“It’s a fantastic example of a strong-willed firm that’s fighting through the crisis, so it can continue to support the UK’s essential workforce.”
To help small and medium-sized businesses weather the storm, Chancellor Rishi Sunak recently announced an emergency loans scheme.
But to date, the 300,000 inquiries have resulted in just 4,200 business loans. Despite the Government pledging to underwrite 80 per cent of the risks, some banks have still been rejecting the requests from customers.