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



Hotel Refinancing – Midlands Region

Refinancing a hotel

Due to a lapse of planning convents for an external function space our client was unable to host wedding and corporate events which resulted in a significant decline in revenue.

Whilst our client immediately advised the lender of the lapse in planning consent and corresponding change in trading profile the lender wasn’t sympathetic as this compromised both debt service and LTV covenants.

This situation resulted in our client being placed in “business support” with a view to a consensual disposal which wasn’t in our client’s best interest or those of the lender.

Debt restructuring plan

After a protracted period of consideration and negotiation the lender agreed to a debt write down of 50% representing £1,500,000 which facilitated a refinancing solution provided by Stewart Hindley firstly with a near-prime lender to wash away the “toxicity” of the debt write down which was ultimately refinanced with a prime lender.

This refinance solution avoided further trade disruption to our clients’ trade and provided certainty whilst planning consents were re-instated and circumvented a potential time consuming and distressed disposal process which wouldn’t have led to a greater loss to the lender than the debt write down.

For more information on how we can help restructure your debt please call us at 01488 684 834

Or contact us today by email

Debt Restructuring – Town House Hotel – Warwickshire

Our client was in the process restructuring his hotel’s assets from a full service product, to short stay accommodation apartments, as our clients full service hotel concept with à la carte dining wasn’t sustainable due to the change in dining out preferences, which resulted in high costs and unpredictable trading, leading to a trading loss and inevitably a breach of debt service covenants.

The existing debt of £6,000,000 was disproportional to the trade and asset value and the change to short stay accommodations, although a viable proposition couldn’t service debt when stress tested and sensitised against the lenders criteria, which in-turn led to a default on debt service covenant. The reality of the situation was that the business could only service debt of £3,000,000 on a full repayment basis.

Debt restructuring solution

After working with a number of commercial valuers to ascertain distressed market values, we entered into negotiation with the lender and secured a debt write down of 50% amounting to £3,000,000 based on comparable market values. The debt write-down was initially refinanced by a specialist near prime lender which we then subsequently refinanced after 36 months to a term debt facility on standard commercial terms.

For more information on how we can help restructure your debt please get in touch

Hotel Debt Restructuring – South East England

Our client owned and operated 2 branded hotels and traded these concerns very successfully supported by his lender who is a well-known High St name. The financial crash of 2008 corresponded with the expiry of our client’s loan agreement of £3,000,000 which was written over an initial 5-year term, amortised over 20 years, on an interest only basis.

Our client’s difficulties occurred when the lender required a current valuation to extend the term of the loan for a further 15 years which was undertaken at our client’s expense. The timing couldn’t have been worse for our client as market values had plummeted for hospitality business post the crash by some 30% and as a consequence an unintended breach of Loan to Value (LTV) occurred.

The was situation was made worse by the profile of the loan which was on an interest only basis which meant that no capital was repaid during the initial term. The write down of values coupled with no capital repayment further compromised the LTV’s resulting in the debt being called in.

This gave our client cause for concern as he could see no way out other than selling his assets hotels at distressed market values which wouldn’t have paid off the principle debt.

Our client was recommended to us to restructure his business debt and secure a refinancing solution. However, given the downturn in the market post the crash our clients trade had reduced substantially to a point where the business could only service debt on a full repayment basis of £1,000,000. As a consequence, we at Stewart Hindley agreed a debt write off of £2,000,000 which enabled our client to continue trading without losing his hotels and livelihood.

The debt write-down was agreed on the basis of securing a refinancing solution in the sum of £1,000,000 with a prime lender, ahead of negotiations so as to provide a certain and secure outcome to enable the deal to proceed, which took almost 6 months to achieve with many meetings involving the existing and the new lender.

For more information on how we can help restructure your debt please get in touch

Betws-y-Coed in North Wales – It took a while but they got there!

It was 2016 when Gidon and Izabela first contacted us to discuss bed and breakfast finance. They had attended a bed and breakfast course run by Karen Thorne at Hopton House in Shropshire and had decided to buy a bed and breakfast in the Shropshire area.  Unfortunately it took a while for them to sell their property and the original concern they were interested in was snapped up by another buyer.

Eventually they found a buyer and started looking again in earnest, however, this time they focused on the Lake District and North Wales (both excellent and beautiful locations!).  After a few disappointing starts they settled on Afon View in Betws-y-Coed, North Wales and their dream really started to materialise.  They completed their purchase and moved into Afon View in December 2018!

Afon View has 7 lovely letting rooms and guests are sure of a warm welcome from Gidon and Izabela.

Afon View is located in a village that attracts outdoor enthusiasts from around the world and is one of the main places to stay in Snowdonia.  Whether you are a walker, climber, kayaker, cyclist  or angler there are loads of places to visit and things to do in the area.

North Devon Bed and Breakfast

Vanessa & Phillip Moyle had previously let out just one room of their house in Salcombe in South Devon and after some time decided that they wanted to use their love of meeting people and their hospitality skills to develop a business in the popular North Devon coastal village of Lynton.

They spent some time looking for the right property and eventually settled on a 4* guest house, Rockvale House.  Rockvale House had been owned for a number of years by the same people and was traded very much to suit their personal requirements.  This presented a great opportunity for Vanessa & Phillip to purchase a well-established 8 bedroomed Guest House located in the heart of Lynton and within the Exmoor National Park with great views.

As the concern had been traded for just 6 months of the year and often closed during peak times the accounts did not reflect the true potential of the business which can make it a challenge to fund from a lenders point of view.  As we, Stewart Hindley & Partners, are specialists in hospitality finance we were able to present a solid case to the lender with achievable goals and projections showing that debt service could be met.

Vanessa and Phillip completed on their purchase in December 2018 and are now looking forward to operating the business on a year round basis and sharing the beauty of North Devon and Exmoor with their guests and, of course, meeting lots of new and interesting people along the way!

If you are looking for a warm welcome, comfortable stay and panoramic views  why not choose Rockvale House on your next visit to the area!

What Vanessa & Phillip say about Stewart Hindley & Partners….

From the first moment we contacted Stewart Hindley & Partners and spoke to Carol and then Mike Cox they could not have been more helpful, they were straight on the case working at such a speed it was brilliant.  Mike took away so much pressure and stress normally associated with a purchase like this, he spoke to us in such an open and honest way it was really refreshing.  His professionalism was superb and we are very grateful to him.  We know Carol did so much behind the scenes too.  We have no hesitation in recommending Mike Cox at Stewart Hindley & Partners 100 per cent. 

Thank you

Ness and Phil, Rockvale House


Boscastle B&B with Tea Rooms

Louise and Richard contacted us originally in August 2017 as they were looking to purchase a holiday lodge site.  Unfortunately this purchase didn’t progress but after much searching they found Bridge House in Boscastle, Cornwall.

Bridge House is a substantial stone property with popular tea rooms and guest accommodation.  Louise & Richard fell in love with it and decided this was the property for them so it was full steam ahead.

Stewart Hindley & Partners submitted a comprehensive loan proposal outlining Louise & Richards plans for the business going forward and including all historical and projected finance information.

After a successful bank meeting the loan was offered subject to valuation.  Valuers were appointed by the bank and valuation was undertaken and the report duly received.  Thankfully the valuation was positive and the purchase was completed after all the legal work was undertaken.

Louise & Richard moved into the property in July 2018 so had to hit the ground running over the busy Summer period.  If you need accommodation or something to eat in Boscastle you know where to get a warm welcome and a cup of tea!

St Ives Hotel Dunoon – 1 year on

Katia and Jonathan Smith decided they wanted to run a bed and breakfast in Scotland and after researching the areas and looking at what was available they decided to purchase the St Ives Hotel in the coastal town of Dunoon.

The hotel was in a good location being close to the sea and town facilities and had been run by the owners for 33 years.  The owners decided it was time to retire which provided Katia and Jonathan a great opportunity to purchase a going concern with plenty of potential in increase the trade.

Both Katia and Kevin worked in professional roles in London and had excellent transferable skills so although they had never run a bed and breakfast before they had great interpersonal  skills and Katia had a good level of online marketing experience which was  shown in by her work with MumsNet.

We worked closely with Katia to progress the purchase and  we are pleased to say that they began trading in August 2017 since which time they have upgraded the rooms and have achieved excellent Trip Advisor reviews including a Certificate of Excellence for 2017!  A great achievement in their first year of trading.  It is definitely the place to stay if you are in Dunoon!

Visit St Ives website

Bunkhouse in Portland

Sally Robinson and her partner Tony had worked in the hospitality trade in a variety of ski/holiday resorts and wanted to use their experience to run their own business.  They came across a niche business in Portland in Dorset which was a bunk house catering for divers who regularly visit the area and decided that this was the business they wanted.

Bunkhouse accommodation may be basic but it is a very affordable option for those looking for a comfortable but cheap place to stay.  A warm, friendly welcome after a hard day diving, climbing, sailing or walking is just what is needed when you want to relax and recover from an active day out.

The property had been run successfully by the current owner to suit her lifestyle and was not being marketed to its full potential as there was a very limited website and no social media presence.  As with many bed and breakfast businesses the trade was limited but the good news was this provided Sally and Tony with a great opportunity to buy a trading business which had the capacity to increase turnover.

The purchase did present a few challenges but by working with us at Stewart Hindley & Partners these were overcome although it did take some time!  Stewart Hindley & Partners presented trade projections which were seen as being achievable and representative of the industry.

Our unique knowledge of the hospitality trade means we are able to provide lenders with deals which are not only projection led but are realistic to the trade.  Our track record with the lenders means they can trust the information we provide them.

Sally and Tony will be widening their market from just the diving community to include climbers, walkers, sailing enthusiasts and basically anyone who wants comfortable budget accommodation.

Arden House – Kingussie Scotland

It had been a long held dream of Janet & Graham to run their own bed and breakfast.  In preparation and to find out as much information as possible they signed up and attended a “How to Run a Bed and Breakfast” course run by Karen Thorne in Shropshire in the summer of 2017.

Finding out what was involved was extremely helpful and spurred them onto fulfilling their dream.  The course helped them to focus on the location and type of B&B they wanted to run.  Following the course, they joined a Facebook group for course attendees and this gave them the opportunity to meet up with a couple who have run a B&B for a number of years near to Kingussie (the area they wanted to buy in).

The property they decided to purchase was Arden House which is a lovely Highland villa style property in the attractive and popular town of Kingussie in the foothills of the Cairngorms and Monadhliath Mountain ranges.  The property has a total of 8 bedrooms; 5 en-suite letting rooms plus owner’s accommodation.

Stewart Hindley & Partners wrote and submitted a comprehensive loan proposal to two lenders who showed interest in funding the property.  The property had been successfully traded for a number of years and even though the owners wanted to retire and move closer to family they were still trading as much as possible providing a good level of turnover and profit for the business.  This really helps to show sustainable trade and if/where there may be opportunities to improve the trade going forward.

The chosen lender was not always the quickest to respond so the case did take a little longer than hoped for but as with most things the best things are worth waiting for!  Janet and Graham have now completed on the purchase and moved into Arden House on 8 March 2018.

What Janet & Graham say…

We tried initially to secure a business mortgage for Arden House ourselves but this was unsuccessful.  Not to be deterred, we recalled how on Karen’s course she had recommended going with a broker and had suggested Steward Hindley.  Following an initial email, Mike, our broker helped us to revise our business plan and put us in touch with potential lenders.  As we were new to the whole process of purchasing a B&B, the help and support given by Mike was invaluable and we managed to secure funding.  We believe that without Stewart Hindley we would never have secured the funding we needed and can’t thank Mike enough.  It still feels unreal that we now actually own Arden House and have given up the 9-5.