Case Study Category: Advice & articles

Near Howe Holiday Cottages – Lifestyle Change During The Pandemic

Strong Holiday Letting Business

Our clients, Fiona and Mark Shore, decided to take the leap and buy a self-catering holiday cottage letting business in the Lake District National Park having decided on a “life style” change from their location in the Home Counties.

Near Howe, marketed by Colliers International, presented a unique opportunity and perfect fit for Fiona and Mark’s “life style” change, and as Near Howe’s business was accommodation led, with an established trade and well-presented and maintained self-catering cottages as a result there was no need to embark on a steep learning curve had the business been food and beverage led.

How to secure a commercial mortgage

The real challenge Fiona and Mark faced was securing a commercial mortgage to assist them with the purchase of Near Howe, particularly during the pandemic, when the business was closed.

To realise their dream of owning a life style business, Stewart Hindley & Partners were introduced by Colliers International, to Fiona and Mark to provide a commercial mortgage solution to assist with their purchase on the most competitive terms available.

As with all “new to trade operators” commercial mortgage lenders’ are risk adverse, particularly so when the trade is being disrupted due to the pandemic, so this wasn’t one for the High Street. As a consequence, a specialist lender was identified, who had appetite to lend on prime lending terms and interest rates despite the challenges the purchase of Near Howe represented and the transaction process was fully completed within 3 months.

Successful mortgage outcome

During the transaction process, Stewart Hindley continuously engaged throughout the process with all stakeholders, which included the Vendors, Sales Agents’, the Commercial Valuers’ and all sides’ Legal Representatives and of course the Lender to ensure a successful and timely outcome.

Fiona and Mark completed on Near Howe in early February and all of the team at Stewart Hindley wish them every success for the future.


What Fiona & Mark have to say about Stewart Hindley:

“We would like to thank Stewart Hindley, particularly Chris McDonagh for their advice and support.  They were in constant contact throughout the process, providing us with advice from the initial viewing process right the way through to contract exchange. Without their help and support I don’t think we would have been able to purchase Near Howe and be where we are today.  We would recommend Stewart Hindley to anyone else thinking of making a similar lifestyle change. “

South Yorkshire Hotel – Loan Restructuring

Loan facility review

A South Yorkshire hotel operator came into difficulty with his High St. lender when the initial term of his debt had expired.

Our client was unaware that his loan facility was subject to review after 5 years, this is referred to as the initial term loan facility, although the debt was amortised over 15 years, known as the repayment period, our client assumed that the initial term would simply “roll on” as long as he maintained his loan repayment.

This is a popular misconception, as when the lender initiates an end of initial term review, the lender requires a valuation for the purpose of their security, which doesn’t necessarily represent open market value, for the purposes of their loan to value covenant as a result this can lead to a breach of loan to value covenant.

In support of the valuation the lender will also require 3 years trading accounts and management information to date to ensure that business can meet its debt service obligations both actual and when stress tested, as well as ensuring that there are sufficient cash available within the business to service the debt then this may also lead to a breach of covenant.

Breach of covenant

As our client incurred a breach of all of these covenants he was transferred to business support which is a specialist division within all banks that decide if the business can be “turned around” and if not, as was the case with our client, they (the lender) have requested that their debt be refinanced or the property (the lenders security) disposed of either consensually or non-consensual basis.

Turnaround finance specialists

Our client opted for a refinance and after searching the internet for “turnaround finance” specialists instructed Stewart Hindley to provide a refinancing solution.

After a thorough review of our clients’ business and with the assistance of a hospitality consultant to improve the metrics and dynamics of the trade Stewart Hindley were able to provide a refinance solution on preferential terms over a fully amortising period of 25 years with an alternative High St. lender.

Understand your hotel loan

The take away from our client’s experience is to fully understand what type of loan you are being offered and don’t be reluctant to ask questions and get a full explanation from your lender if you are in any doubt as they are duty bound to act responsibly and treat their customers fairly.

If in doubt about your business loan or your relationship with your lender, speak to a debt restructuring specialist, such as Stewart Hindley and Partners, for impartial and no obligation advice.

Call us on 01488 684 834 to get help today

 

 

New owners at Ellinbrook Guest House – Hunstanton

Richard and Nicola had been letting out Daisy’s Cottage in Wells next the Sea and decided that they wanted to take their letting to the next level so started to search for a suitable bed and breakfast property in Norfolk.

They found Ellinbrook House in the popular coastal town of Hunstanton. It wasn’t until they started to look at funding options they decided that the best course of action was to engage a specialist broker to help them secure the best possible deal given their personal circumstances. Richard contacted us here at Stewart Hindley & Partners and the journey began in earnest.

We liaised with a number of lenders, not all of whom were interested in funding the deal, however we did manage to secure them the required amount of funding to enable them to purchase their new venture. To help minimise the lenders risk Nicola will continue to work in her current employment on a work from home basis and will be on hand to help Richard with changeovers and busy periods.

The lenders see a background income as reducing their lending risk but it is not taken into account when looking at the lending requirements, the business must be able to support the debt service or at least have the potential to do so. You should always bear this in mind when you are looking to buy a B&B.

Even though Richard and Nicola had been letting out their holiday cottage for a number of years they were still considered as “New to Trade” by all the lenders. It has taken a bit longer than initially assumed but they have now finalised the lending and will be open for business from September 2019. So, if you want to have a relaxing stay on the Norfolk coast why not check them out at Ellinbrook House

What Richard & Nicola say about Stewart Hindley & Partners……

When the opportunity came up to purchase Ellinbrook House we knew we would need assistance from a specialist broker to help secure the funding we would require. We spoke to a couple of firms but were struck with how professional Chris was and how well he explained the whole process to us.

Despite a couple of setbacks along the way Chris and Carol worked tirelessly to secure us the funding required, I don’t think there would have been any way for us to have secured it without Chris and Carol’s help. We are now up and running and loving it!

Thanks for all your help, Richard & Nicola

Ellinbrook House 

Love Whisky? You will love The Gables B&B

Bed & Breakfast for the Whisky Lover!

Our clients Siebette and Anne-Jan contacted us in May 2018 to ask about hospitality finance as they were looking at moving from Holland to Scotland to fulfill their dream of owning and operating a whisky themed bed and breakfast.  Both of them have an in depth knowledge of the Whisky industry and have their own impressive collection from which they offer tasting sessions!

After much searching they found The Gables in Dufftown a perfect location as it is on the famous Whisky Trail.  The Gables was an established bed and breakfast but was traded very much to suit the owners so there was no focused effort on the trade which meant limited accounts and made the deal just that little bit more challenging.  We were able to position the deal showing realistic and achievable projections for when Siebette and Anne-Jan took over.

The process of the loan application went through fairly seamlessly, however, there were some issues during the legal work stage and these have caused some major delays.  The loan was offered in September and instead of being able to complete and move in at the beginning of December, which would have timed well with their house sale and move from The Netherlands, they have had to wait until February 2019 for the legal paperwork to be sorted out.  This obviously caused some major stress not least because they were moving country as well (as home) and they were also ready to go with a new website and links to the distilleries in the area – it seemed it was all systems go!  It was a very frustrating time.  Stewart Hindley & Partners tried to assist them by continuing to engage with the lender and suggesting ways that things could move forward.  Eventually the dream came true and they became the owners of The Gables on 30 April 2019!

To cut a long story short, they are now trading well and offer their guests themed packages such as:-

  • Whisky & Chocolate
  • Whisky & Cigars
  • Whisky & Cheese
  • Don’t Drink & Drive Whisky Tours

In addition to the Whisky there are a host of other things to do in the area, Walking, Skiing, Fishing and Golf to name a few.  Why not visit their website to find out more….

https://www.thegablesbb.co.uk/

https://www.facebook.com/thegableswhiskybb/

What Siebette and Anne Jan say about Stewart Hindley & Partners…

It has been our dream for years to run a whisky themed B&B in Speyside/Moray. All though we did a lot of research ourselves and developed the outline of a business plan, it was difficult for us – being Dutch and without experience in starting a hospitality business – to come up with the necessary figures and obtain funding. We almost give up on our dream when we heard of Stewart Hindley and contacted them. They reviewed our ideas and financial situation and advised our dream was possible. They helped us with our business plan and knew which lenders to approach. They supported us at every step in the process, both with their extensive expertise and – equally important – mental support. We could trouble them with any question we had, answers were always provided quickly and in a way we exactly understood what was going on. After obtaining the commercial mortgage there were problems in the conveyancing of the property we had set our eyes on. All though beyond the scope of their service Stewart Hindley kept in touch with us and relevant parties, they did everything they could to help us to get this sorted. And in the end, all came right and we are now the proud owners of The Gables Whisky B&B. Carol, thank you so much for everything, we could not have realised our dream without you!

Kind regards,

Anne Jan & Siebette

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