Food & Drink

Just Eat delivers loans to local takeaways – but there’s a flipside

By Kitty Knowles 17 July 2017

Can the Just Eat - Funding Circle gravy train be trusted?

It’s long delivered your pizzas. Now delivery giant Just Eat is dishing out loans too.

The takeaway marketplace has just announced a new partnership with Britain’s biggest peer-to-peer lender, Funding Circle.

But will it help your local businesses bring home the bacon?

Funding Circle Founders Samir Desi, James Meekings, and Andrew Mullinger. Pic: Funding Circle Blog/vicki couchman

Boosting your balti

There are 30,000 British restaurants on Just Eat’s takeaway app. And many will be exactly the kind of small and medium-sized companies that Funding Circle investors look to support.

Now, just being on the Just Eat app will give your takeaway discounted sign-up up fees, meaning it’s more able to apply for a business loan up to £60,000.

“Small businesses are the backbone of our economy,” said Funding Circle co-founder James Meekings.

“Nowhere is this more evident than in the great tradition of the British takeaway restaurant.”

“Our latest suite of offerings … will give our restaurants more opportunities to reduce costs and make their businesses even more profitable and competitive,” said Just Eat director Robin Clark.

In a period where we’ve seen government business loans hit an all-time low, it’s clear why restauranteurs will ring in the new partnership, with some already reaping the benefits.

“We were looking to take advantage of an opportunity to expand the business, but the banks were slow and couldn’t provide us with the help we needed,” said Yilmaz Guney, the owner of Turkish restaurant Petra in Islington, London, who borrowed £16,000 for a refurbishment.

“Our partners Just Eat directed us to Funding Circle who arranged the loan for us in a matter of days.”

Flipping the burger

While all this seems like good news for business, that doesn’t mean Britain’s food industry should be without its concerns.

Just Eat, after all – along with the likes of Deliveroo, UberEats and Amazon Restaurants – have been accused of squeezing the profits out of the takeaway scene, and that’s far from golden.

At present restaurants pay Just Eat between 10-13% commissions for each order, but this reportedly climbs as high as 30% for services like UberEats. And some industry insiders are worried that if one company wins out, it will be able to charge whatever gut-wrenching rates it wishes.

Legal terms that prevent JustEat restaurants from selling their dishes at cheaper prices elsewhere also essentially stop restaurants from offering cheaper deals – even on their own website.

And if higher commissions force prices up on JustEat, those prices will have to rise across the board.

Such concerns have already prompted smaller rivals like Preoday to issue formal complaints to the Competition and Markets Authority (CMA) after news of the Just Eat – Hungry House merger broke.

Our takeaway

So yes, Just Eats’ promise of business loans is shiny and appealing. But if perks like these succeed in attracting the majority of Britains’ eateries, it gives them the freedom to be a law unto themselves.

Boosting British business is important, but we can’t forget that Just Eat is a business too, and its in its interest to always seek to charge more and make more money.

Inevitably, that money’s got to come from somewhere, and it will either be from Britain’s already struggling restaurant scene, or your pocket.