The UK has a thriving tourism sector and welcomes millions of visitors every year from all over the world. As a result, the accommodation industry is very large and diverse, encompassing bed and breakfasts, budget hotels, hostels, luxury hotels and many other options. There are accommodations to suit all kinds of requirements in terms of price, facilities and location.
Bed and breakfasts make up the largest section of the accommodation industry, approximately 28% larger than the budget hotel industry. The businesses can be incredibly diverse, from boutique properties to themed B&Bs. It attracts all kinds of people, including retirees looking for a way to invest their money and time, people with previous experience in hospitality and those in search of a career change. A bed and breakfast requires hard work and dedication in order to succeed, so it is important to do your homework before you jump in with both feet.
One of the most challenging aspects of running a bed and breakfast is the finance. There are many different factors to account for if you want to be secure financially, including seasonal demand, the prices you charge, your operating costs and cash flow. When starting out you’ll need to have a suitable amount of funding available to see you through the challenging first months, even if you already own the property you want to use as a B&B.
One way to secure additional finance is to mortgage or re-mortgage the property you will be using as a B&B. This can unlock funds that you can use for many other things. Bed and breakfast funding and mortgages are a specialist sector, but there are many lenders prepared to loan money to businesses because of the strength of the industry. If you have a good business plan, you could get a loan worth between 60-70% of the value of the property.
Lenders are more likely to offer finance to people with experience of the sector, especially if they have a successful background. However, this doesn’t mean that inexperienced people will be penalised. If you have a solid business plan including realistic forecasts for occupancy and income, you should be able to obtain the funding you need. You can also make your plan more attractive by hiring experienced staff to help you get up and running.
We specialise in helping people find funding for several specialist areas, including hotel, bed and breakfast and equestrian finance, funding and mortgages. Our team of experienced brokers can assist our clients in making their plans look as attractive as possible so they stand the best chance of securing the funds they need.