Business Support Finance – COVID-19

Launched in response to the coronavirus outbreak, the Coronavirus Business Interruption Loan Scheme (CBILS) is designed to support UK businesses during this period of disruption. CBILS provides the lender with a Government backed guarantee of 80%, against finance offered under CBILS with the balance of risk being held by the lender.

CBILS is designed to assist with cash flow, initially by way of a Capital Repayment Holiday (Interest only period) of 12 months or a commercial loan over 6 years, with no repayments in the first 12 months followed by a 5-year loan facility on a full repayment basis.

CBILS will only be made available to businesses that were deemed “viable pre Covid 19” and as a consequence a “robust” case must be made for your new Capital Repayment Holiday or loan based on your pre Covid trading information.

It is important to note that if your financial and supporting information isn’t presented correctly to meet the lenders requirements, this could lead to a decline for support, which may impact on your existing loan covenants when considered against your lenders’ “prevailing” debt service criteria which may give your lender cause for concern post Covid 19.

During this period of uncertainty, we at Stewart Hindley & Partners are here to help you and have direct access to all the lenders’ that offer CBILS and who are accredited by the British Business Bank. https://www.british-business-bank.co.uk/. If for any reason your business is not eligible for CBILS then we can provide other routes to finance to support your business.

Given the record levels of demand that banks are incurring for general advice and CBILS applications, we at Stewart Hindley & Partners are able to offer, on your behalf, support through our own FCA relationships with all CBILS accredited lenders.

As a result, we are able to deal with the relevant Business Relationship Manager directly, to ensure a prompt application, with the best possible outcome given your circumstances and thereby take away the uncertainty by securing a decision in-principle within 24 hours.

If you’d like to discuss how we can assist you with your CBILS application or any other funding requirement during these challenging times, then please don’t hesitate to get in touch with us either via completing the contact form or by calling us directly on 01488 684834.

How are GP Practices funded?

All of us use NHS services in some shape or form, including visiting our local GP when we feel unwell. But have you ever wondered how GP practices are funded or how a GP surgery works?

Many patients fail to understand that GP surgeries are run like a business and rely heavily on funding to provide a high standard of care to a set number of patients. This is one of the reasons why cancelling GP appointments or not turning up to a GP appointment can have a huge impact on GP’s budget and the services they are able to offer.

How are GP practices funded in England?

Throughout England, GP surgeries receive on average, £152. 04 per person, with England’s 7,543 general practices sharing £9,050,006 million. And this is to deliver care for approximately 59,527,981. These figures are based on data released in the 2017/2018 financial year.

The NHS offers three different types of contracts for GP practices, which impact the services they are able to offer. These may include General Medical Services, Personal Medical Services and Alternative Provider Medical Services.

The amount allocated to each GP practice depends on the type of contract provided.

How are GP practices funded in Scotland?

The way GP practices are funded in Scotland is different to England, following a vote for a new GP contract in Scotland that has changed the way Scottish GP practices are funded.

Set out in two phases, the changes outlined have also had an impact on GP pay structures. Phase one took place in April 2018 when the GP Workload Formula was introduced. The new formula has been designed to re-estimate the number of consultations per patient based on age, sex and deprivation. It has relieved the pressure on the workload of GPs in Scotland as it provides a more accurate reflection of patient inflow and demand.

Phase two is set to be introduced in 2020/2021 and although it is still subject to further negotiations between the Scottish government and GPC Scotland, the plans will aim to introduce a standard income range for GPs with a set pay progression. The main purpose of this change will be to remove the link between the new formula and practice funding.

All GP practices will still be required to submit annual data on earnings, expenses and hours worked to NHS National Services Scotland Practitioner Services.

Why do GP practices need GP surgery finance?

There are many reasons why medical professionals might require GP practice finance, including:

  • If a partner is leaving and the remaining partners need to buy them out
  • If the partnership is increasing and a loan is required to be split between the existing partners in order to dilute their shares
  • If practice improvements or extensions are required
  • If a new practice is being set up

At Stewart Hindley, we understand that the right investment is crucial when it comes to providing primary healthcare. Whether you’re looking for funding for an NHS GP practice or a private surgery, we’ve got the skills and specialist experience to help you secure commercial finance for your GP surgery. To find out more, get in touch.

Coronavirus – Business Help Available

As the coronavirus (COVID 19) continues to spread across the UK mortgage lenders have been taking special measures to ensure that borrowers are protected from financial shocks.

Most, if not all, lenders have put in place emergency funding to help existing SME businesses get through this period of uncertainty.

If you feel that your business may come under duress over the coming months, please speak to us now so we can assist you to put in place interest only periods or repayment holidays.

When Do You Need an Alcohol Licence?

In the UK, any business that plans to sell or supply alcohol must operate in accordance with the relevant licencing laws.

But what does this mean for your hospitality or accommodation business?

Can you sell alcohol without a licence?

The Licencing Act 2003 is the legislation used to licence premises in England and Wales on their sale of alcohol. This Act outlines the laws that any business selling alcohol must follow, including the licences they need to apply for and the processes they must put in place to ensure that the sale of alcohol is carried out responsibly.

Under the Licensing Act 2003, you must have both a Personal Licence and a Premises Licence to sell or supply alcohol on your premises.

What about providing free alcohol to my guests?

Many holiday lets, B&Bs and hotels provide guests with a welcome hamper filled with local delicacies, including a bottle of wine. This is a great way to impress your guests and make a good first impression.

However, if you provide free alcohol for your guests, you should be aware that you will still require an alcohol licence. This is because your guests have paid to stay in your accommodation, which means they are essentially paying for the ‘free’ alcohol.

The government is currently in the process of introducing Community and Ancillary Sales Notices (CANs) that will allow accommodation businesses to sell small amounts of alcohol for a nominal fee.

How do I apply for an alcohol licence?

To apply for an alcohol licence, you’ll need to complete an application form and send it to your local council, along with the fee. Some councils accept electronic applications – if this is the case, you’ll be able to apply online.

Once you have obtained a Premises Licence, you will need to become a Personal Licence holder. This will allow you to provide alcohol on behalf of your holiday home. You can apply for this licence through the Government website.

What is the cost of an alcohol licence?

There are two sets of fees involved in applying for an alcohol licence, both of which are based on rating bands. You’ll initially need to pay a fee to cover the cost of applying or varying a licence. In addition to this, you will have to pay an annual charge once the licence has been granted.

At Stewart Hindley, we can help you with all aspects of purchasing or re-mortgaging a hospitality business, including advice for licencing and legalities. For more information, please get in touch with our expert team.

How to Start a B&B or Guest House

Whether it’s always been a lifelong dream of yours to open a bed and breakfast (B&B) or you’ve identified a great business opportunity, running a B&B can be incredibly rewarding and lucrative.

At the same time, the purchasing process can seem overwhelming. There are a number of factors to consider before opening your B&B doors to the public.

If you’re hoping to open a bed and breakfast and you don’t know where to start, you’ve landed in the right place. Here’s our guide to opening your very own B&B.

Is it right for you?

First and foremost, you must consider whether or not owning a bed and breakfast is right for you. This is something that takes a lot of hard work and commitment, so starting a B&B should not be a decision that you take lightly – your new business will require your time and attention day in, day out.

Consider the costs involved

Once you’ve committed to the idea of opening your B&B, it’s time to consider the costs involved. Whether you’re buying a B&B, transforming your own home into a B&B or purchasing an existing bed and breakfast business, the same running costs will apply.

From merchant services costs, food, personal expenses and linen costs, through to furnishings, business supplies, smoke detectors and fire alarms, there’s an awful lot to consider. Make sure you’re aware of all the costs involved and have calculated how much you will need to charge to cover these expenses and make a profit – is it achievable?

Familiarise yourself with the rules and regulations

Before opening a bed and breakfast, you’ll need to familiarise yourself with the rules and regulations associated with running a B&B business.

And, although you don’t need a qualification or licence to open a B&B, you will need to take into account fire regulations, consult with your local authority planning office before putting any concrete plans in place, gain planning permission for any alterations, obtain necessary alcohol and TV licences and make sure you register with the HMRC for tax purposes.

Know your market

Before you consider opening a B&B, it’s important that you understand the needs and expectations of your target market.

Depending on the location of your bed and breakfast, you’ll either be catering for business or leisure guests, or a combination of the two, and it’s important that there is a demand for your services in the area.

With this in mind, don’t fall into the trap of falling in love with a property, only for it to fail in the first few months due to there not being any customer demand.

How much money do you need to start a B&B or Guest House?

The amount of money you’ll need to start your new business venture will depend on a number of factors, including how much work needs done to the property, whether you already have an existing client base or not, and the level of service you are intending to offer.

All of these should be analysed in your business plan and marketing strategy before you even consider purchasing or converting a property.

Tourism is big business throughout the UK. But, if you’re thinking about starting a bed and breakfast, it’s crucial that you do your research to determine whether it’s the right decision for you.

If you’ve done your research and you’re ready to set up your own B&B, get in touch today to find out how we can help with your mortgage for a bed and breakfast business.

What to Look for When Purchasing a B&B or Guest House

Many people dream of owning their very own bed and breakfast (B&B). Running a successful B&B business can be exciting, rewarding and profitable, but there are a number of other factors you should consider before taking the plunge.

With the average B&B business in the UK generating £70,000 a year, the B&B industry is thriving, making it a great business opportunity for those looking to earn a living doing something they love. But what should you consider when purchasing a B&B?

Do your research

First and foremost, before purchasing any property or business, you should always carry out extensive research into the property and the area surrounding your chosen B&B business.

Some of the questions you should be asking include when was the B&B established, its yearly turnover (if this is not disclosed, ask why!) and whether the business is currently active or not.

What’s included in the sale?

Before you sign on the dotted line, make sure that you find out what’s included in the sale price. For example, fixtures & fittings are usually included in the purchase price check that this is the case, how many employees does the business have, and is there any living accommodation?

The last thing you want is to be out of pocket before you even get the keys to your B&B.

Why is it being sold?

A lot of people are afraid to ask the question “why are you selling up?”

But this is one of the most important questions you should ask when looking to buy a B&B. After all, you don’t want to be investing in a B&B business that’s struggling.

Of course, many B&B owners sell for perfectly plausible reasons, such as for family or due to a change in circumstances. But it’s important to ask.

Where do you stand legally?

You should understand all of your legal obligations before investing in a B&B, including any food hygiene legislation you will need to adhere to, health and safety regulations, and any fire precautions that will need to be in place.

You should also be aware of your insurance and liability obligations, terms and conditions when it comes to bookings, property damage and cancellations, as well as small claims.

You may wish to attend a Bed & Breakfast course which will cover all aspects of owning and operating a bed and breakfast business.

How much deposit do I need to buy a bed and breakfast?

A deposit is required for commercial properties. With this in mind, if you’re looking at a minimum deposit for mortgage, you can expect to put down around 30– 40 percent of the asking price – this is standard for all commercial properties.

If you’re considering purchasing a B&B, we can help. Our expert team is perfectly placed to help you obtain the best financial solutions on the market, so get in touch today.

How Much Deposit Do I Need to Buy a Bed and Breakfast?

Opening a bed and breakfast (B&B) can be a great way to generate income while stepping back from the typical 9 to 5. It’s hard but rewarding work, and enables you to create a business that reflects your personality and passion as a hospitality business operator.

However, unless you live in a large property with a significant number of spare rooms, you will need to invest in a new property in order to set up a B&B business.

In most cases, that will mean taking out a mortgage. But what sort of mortgage will you need? And how much deposit will you be expected to pay when you buy your bed and breakfast?

As with any mortgage, different lenders will have different requirements when it comes to deposits for a B&B. The type of mortgage you will need will depend on a number of factors, including how much of the total space in the property will be used for commercial purposes.

Deposit for a commercial mortgage

In most cases, if you are using less than 40% of the property for personal use, you will require a commercial mortgage, or a semi-commercial mortgage.

Most commercial mortgages require a deposit of between 30% and 40%, depending on the level of risk they deem your business to come with and the type of commercial mortgage you have applied for.

Buying a B&B without a deposit

Whichever way you buy your B&B you will need a deposit.

If you don’t have a cash deposit for your bed and breakfast, you may be able to release equity from your existing property or another property to release the necessary funds for the purchase of the new B&B and Stewart Hindley can help with this.

If you’re considering buying a bed and breakfast, it’s important to speak to someone experienced in the hospitality finance sector to ensure that you are aware of all the funding options available to you. Get in touch to speak to one of our skilled and experienced team.

How To Turn Your Home Into a Guesthouse

Running a guesthouse can be rewarding and fun, not to mention a great way to make money from your property without having to sell it.

However, it’s important to keep in mind that running a guesthouse is a big commitment, and there are rules to follow and standards to meet.

Here are just some of the things you need to consider if you’re thinking of turning your home into a guesthouse.

Starting a guesthouse business

Get The Relevant Permissions

Before you can open your guesthouse, you’ll need to acquire the relevant permissions, so your first step should be to contact your local council to see what is legally required.

If you’ll be carrying out building work on the property, you may need to apply for planning permission. Regulations change frequently and vary depending on where your property is located, so be sure to check in with your local planning office.

Even if you aren’t making any structural changes to the property, you might need to complete a change of use application before you can open your home as a guesthouse. Again, ensure you check these details with your local council.

You’ll also need to comply with fire and gas safety legislations, as well as food standards if you’re planning on serving any meals on the premises.  Find out more by contacting your local environmental health department.

Finally, make sure you contact your mortgage provider and insurer. You may need to update your policy and will need to switch your existing mortgage to a commercial mortgage.

Fit Out The Guest Rooms

Once all the relevant permissions are in place, you’ll need to ensure that your property is up to the job of hosting visitors. That means properly furnished bedrooms with facilities including WiFi, TVs, storage space, and tea and coffee making facilities. Today, most guests will also expect their room to come with an en suite bathroom.

If you’re offering breakfast or other meals at your guesthouse, you’ll need a dining room where your guests can comfortably enjoy their meals.

Finishing touches such as bathrobes, slippers, and washing products can go a long way to ensuring your guests have a memorable experience.

Market Your Guesthouse

If you want to promote your guesthouse effectively, a good website is essential – make sure it’s responsive on all devices, appealing, and optimised for search engines such as Google. Social media platforms like Facebook and Instagram are also useful ways to market your guesthouse successfully.

Running Your Guesthouse

Running a guesthouse can be immensely enjoyable and rewarding, but you’ll also come up against several challenges.

One thing to always keep in mind is that this isn’t just a hobby, you’re running a business and it’s important to approach every aspect of your guesthouse with a business mind to ensure that it is a success.

That’s not to say you shouldn’t have fun! Part of the attraction of running a guesthouse is the interaction with guests, building lasting friendships and ensuring visitors get the most out of their stay.

Running a guesthouse is flexible – you can choose when you want people to stay and when you’d rather have the space to yourself. But it’s important to set boundaries if you want to avoid working 24/7 and burning out. Have house policies in place, including setting out the times breakfast will be available and when reception service will be provided.

Get In Touch

If you’re thinking of turning your home into a guesthouse, get in touch. We can help you find the most effective way to re-finance or release capital to launch your guesthouse.

6 Things You Need To Know Before Buying Commercial Property

Guest Blog

In most circumstances, buying property can be considered a sound investment. This applies as much to commercial property as it does to a domestic property purchase. But in the same way that you would not buy a private house until you had gone through all the checks and put everything in place ready to make an offer, commercial property also requires that you attend to certain preliminaries before making any commitment. So here’s a list of six tasks which should definitely be on your to-do list.

  1. Does this property meet your business needs?

It’s true that a rental property may offer a business a certain extra degree of flexibility, but the downside is often that the business owner has little control over future rental costs. By comparison, a property owner agrees mortgage terms at the outset and therefore has much more control over future outgoings. In addition, where business tenants may have limited options to modify their premises, commercial property owners are free to make any alterations their budget (and the local planning laws) will allow.

It’s usually wise to invest in something slightly larger than you currently require. That means you have room for expansion when needed, and there’s always the option to rent out part of a building to generate additional income while leaving yourself some flexibility to make further changes as required.

Remember too to check ‘business basics’ like adequate parking facilities and good access to the transport links your business trading demands.

  1. Is this the most suitable type of property?

Unless you are an experienced investor, don’t buy a commercial property just because it’s an irresistible deal. Commercial property falls into distinct categories such as business offices, retail premises, industrial sites, leisure accommodation and special-function units like schools and petrol stations. As a novice, that means you should always go for purpose-built property and forget any ideas about conversions and/or complexities like possible ‘change of use’ applications.

  1. Have you set your budget?

Your pending commercial property purchase is a business acquisition and thus will need to feature in your business development plans. That in turn means exploring, and fixing, the budget you have available prior to searching the market. And given that this purchase is also a business investment, part of your planning should also quantify what return you would expect for this capital injection, and specify the period over which you will reap the rewards.

  1. Optimise the location

Most high-performing businesses will positively benefit from an optimum location chosen wisely. That means making relevant decisions e.g. about city-centre or out-of-town sites, the location of your potential market, how close you want to be to your rivals, as well as considering the future growth potential of the area.

This is one element where it will pay to speak to professionals such as estate agents and business brokers.

  1. Assess the local property market

To make an informed decision, you will need to check features such as: local commercial property values and pricing trends, property taxes, mortgage interest rates and rental values. This will give you detailed information about how much your proposed commitment might cost, and what returns you might expect. And as regards investment returns, your analysis will be more helpful if it can establish what your short-, mid-term and longer-term prospects will look like.

  1. Check commercial mortgage availability

There is, of course, little purpose in searching for a property if you are not eligible for mortgage funding. This should be considered as two separate issues:

  1. a) gaining acceptance ‘in principle’ for commercial mortgage funding up to a certain amount;
  2. b) securing a commercial mortgage on a property you intend to purchase.

Obtaining a mortgage in principle is largely a matter of having a good credit record and meeting a provider’s lending criteria, whereas agreeing a mortgage on a specified property is likely to involve detailed structural surveys and property assessments.

Here again, it is likely to be in your interests to seek specialist advice in each of these areas, especially given that commercial mortgage providers will require such detailed information to decide whether they wish to quote mortgage terms.

Finding a commercial property

You may find commercial properties listed on different online sites and perhaps be tempted to go it alone armed with your portfolio of information. However, just as in the domestic property market, the input of local professionals and/or those who specialise in your business sector can prove invaluable. They will ensure you find the best property for your needs and secure a good purchase deal which meets your business investment objectives.

By Matthew Hernon is an Account Manager at Dynamis looking after Business Transfer Agents, Franchises and Commercial Properties across BusinessesForSale.com, FranchiseSales.com and PropertySales.com.

What You Need to Know About Financing a Pub Purchase

Many people who run pubs start off as tenants or leaseholders before considering buying a freehold once they’ve built up their knowledge, skills and experience.

Buying a pub and running it as a free house means you will be an independent business without any ties to a specific brewery or company – so you’ll be fully in charge of every decision.

Of course, buying a pub will usually require some form of finance. If you’re thinking about buying a pub, here’s what you need to know about financing a pub purchase.

Commercial mortgage for pubs

Taking out a commercial mortgage is another way to fund your pub. Working in the same way as a traditional, domestic mortgage, a commercial mortgage will be secured against the property and can form up to 75 percent of the market value of the pub.

Commercial mortgages can be surprisingly affordable. Unlike residential mortgages, they do not have standard rates of interest, meaning the lending manager will look at each application on its own merits in order to determine the level of risk involved and set the rate accordingly.

Of course, securing a mortgage that allows you to buy a freehold or leasehold pub naturally involves several different steps to those required to finance a house purchase.

Merchant cash advance for pubs

While a merchant cash advance is not a suitable finance method for funding the initial purchase of your pub, it may well provide an effective solution for covering costs such as equipment or other unexpected expenses, as well as expansion, stock, or renovation.

If you have a sudden or unexpected need for finance to keep your pub running and your customers happy, a merchant cash advance could provide a quick and flexible solution. This type of pub financing works particularly well for pubs that accept credit and debit card payments, as the advance is repaid this way.

Expert advice

If you’re looking for funding to finance a pub purchase, one of the first things you should do is consult a specialist broker who will be able to provide further information about the options available to you, and search the market for the best possible offers.

At Stewart Hindley, we are experts in this sector. Get in touch to find out more or to arrange a completely free, no-obligation consultation.