Lake District Peninsula – Hotel Finance Client

Our clients have realised their lifelong ambition to own a hotel in the Lake District National Park, which by chance was a stone’s throw away from where they had lived prior to relocating to Geneva, for family and business reasons.

The hotel is a traditional Coaching Inn, located on the Lake District peninsula offering quality food, beverage and accommodation, to locals and tourist alike.

The appeal of the hotel to our client, who is a “new to trade” operator and therefore inexperienced in the food and beverage operation in particular, was the hotel’s General Manager and Head Chef who have led the business over the past 15 years as the hotel was operated under management, with owners who had limited involvement in the day to day operation.

Our client, who has a financial background in trading commodities recognised, after approaching a number of lenders directly for a commercial mortgage, that a specialist commercial mortgage broker was the only viable way to secure a commercial mortgage, particularly during the pandemic, to assist with the purchase of the Hotel.

After an exhaustive search and liaising with several brokers our clients’ instructed Stewart Hindley & Partners to provide the commercial mortgage as Stewart Hindley specialise in the hospitality sector and especially “new to trade” operators looking to enter the sector.

The challenge from the lender’s perspective was that the Hotel was food and beverage led which from a lender’s risk perspective is seen as a complex operation and therefore requires proven and demonstrable experience.

Despite these challenges Stewart Hindley have secured commercial mortgages throughout the UK and in the Lake District in particular for clients who have no trade experience by presenting loan applications that cover off all the lender’s risk and debt servicing and cash flow criteria based on a robust marking plans and future trade projections.

The outcome was that we at Stewart Hindley secured maximum debt leverage, otherwise known as Loan to Value (LTV) over an interest rate of 2.7% gross over a term of 20 years.

This enabled our clients to complete on the acquisition whilst maintaining the confidence of the Vendors, which was also challenging, particularly during these uncertain times.

During the transaction process, Stewart Hindley continuously engaged with all stakeholders which included the Sales Agents, Valuers and all sides’ Legal Representatives and of course the lender’s Business Development Manager, who as a sector specialist fully supported the loan application from initial engagement through to completion, which I’m afraid to say isn’t always the case, to ensure a successful and timely outcome for our clients.

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