Bed & Breakfast Finance Going Forward

2020 is definitely going to be a year to remember. Life went from normal to “lockdown” overnight and hospitality businesses were closed down by the government. So does this mean that you won’t be able to buy a bed and breakfast or guest house in the future?

Of course not, what it does mean is that lenders will see the sector as a higher risk post Covid 19 and as a result loan to value ratios may change. Up until now the maximum loan a new to trade operator would have been able to secure on a bed and breakfast or guest house was 65% of the purchase price meaning you needed at least a 35% deposit plus funds to cover fees such as stamp duty, valuation etc. to be able to buy your dream property.

Going forward we are still to see how lending criteria will change but, having said that, Stewart Hindley & Partners have mainstream and specialist lenders who are still willing to lend on hospitality properties. We don’t know what society will look like after the Covid-19 pandemic has gone but one thing we do know is that many people will be looking to take more short breaks and staycations in the UK rather than travelling abroad.

Post Covid-19 could mean a boom period for bed and breakfast owners which would help them to recover from the sudden loss of their incomes and hopefully inject some confidence back into the sector.

If you are thinking about buying a bed and breakfast or guest house and need the best finance deal available to meet your circumstances speak to us here at Stewart Hindley & Partners as we are specialists in the hospitality sector and if we can’t help no one can!

Contact us today and you could have your own bed and breakfast.

CBILS Funding

CBILS Funding

Lenders are currently overwhelmed with applications and it may well take several weeks before the relevant lending manager gets to look at your case and then assess your application. At Stewart Hindley & Partners we have direct access to your local r lending or relationship managers. By using an FCA approved broker such as ourselves you can dramatically reduce the amount of time your application will take, get the best interest rate available given your circumstances and clarification of your situation in the immediate future.

Not every accredited lender can provide every type of finance available under CBILS, and the amount of finance offered varies between lenders. As “whole of market brokers” we have access to a wide range of lenders and will be able to find you a loan solution even if the prime lenders have declined to help.

Stewart Hindley & Partners will do all the work for you all you need to provide is the relevant supporting information.

The British Business Bank has a lot of information available to small businesses to help them access funds during this unprecedented time a summary of which is below.

The lender makes a decision

The lender, not the British Business Bank has the authority to decide whether to offer you finance.

Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

  • they exclude the Principal Private Residence (PPR), and
  • recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied

 If the lender turns you down

If one lender turns you down, you can still approach other lenders within the scheme but this will be considered as “new to bank” and differing qualifying criteria may apply.

Access to the scheme has now been opened up to smaller businesses facing cashflow difficulties who previously would not have been eligible for CBILS because they met the requirements for a standard commercial facility.

You may therefore consider re-contacting your lender if you have previously been unsuccessful in securing funding.

Who is eligible

Your business must:

  • Be UK-based in its business activity
  • Have an annual turnover of no more than £45 million
  • Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
  • Self-certify that it has been adversely impacted by the coronavirus (COVID-19).

View the British Bank Quick Eligibility Checklist

https://www.british-business-bank.co.uk/wp-content/uploads/2020/04/CBILS-check-list-v10.pdf

Businesses from any sector can apply, except the following:

  • Banks, insurers and reinsurers (but not insurance brokers)
  • Public-sector bodies
  • Further-education establishments, if they are grant-funded
  • State-funded primary and secondary schools

View CBILS frequently asked questions for businesses

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/cbils-faqs-for-smes/

 What lenders will need from you

When you apply for a business loan, most lenders will ask you for the following:

Details of the loan

  • The amount you would like to borrow
  • What the money is for — the lender will check that it’s a suitable business purpose and the right type of finance for your needs
  • The period over which you will make the repayments — the lender will assess whether the loan is affordable for you

Supporting documents

You will need to provide certain evidence to show that you can afford to repay the loan. This is likely to include:

  • Management accounts
  • Cash flow forecast
  • Business plan
  • Historic accounts
  • Details of assets

The above requirements will vary from lender to lender. If you do not have everything listed here, a CBILS loan could still be an option to provide finance to support your business.

Note: For many customers approaching their existing lenders for a smaller facility, the process may be automated and therefore may not require the same level of documentation.

To learn more about lenders’ requirements, see the Better Business Finance lending application checklist.

Here’s the link – https://www.british-business-bank.co.uk/wp-content/uploads/2020/04/BBF_factsheet_-_lending_application_checklist.pdf

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.

Five Key Factors To Consider When Converting A Home To A B&B

If you are thinking of running a bed and breakfast business from your UK home, this will almost certainly involve significant finance considerations.  Our specialist team of b&b finance advisors, here at Stewart Hindley, have identified 5 key factors which will come into play:

  1. Planning Permissions

Whether or not you will need building planning permissions will depend on the amount of building work required and will be subject to the local authority’s usual residential planning guidelines.

If you are converting more than one or two bedrooms, you may also be required to apply for ‘change of use’ and your local council should be able to provide advice.

  1. Building Regulations

The building regulations which apply to bed and breakfast establishments change quite regularly, particularly with regard to health and safety regulations, so it’s vital to refer to an up-to-date source of information.

Different regulations will apply depending on the size of your house and the number of guests you want to accommodate.  At minimum, you are likely to have to install things like fire doors, emergency lighting and fire safety signage, and the kitchen will probably need some work too.

Bed and breakfast businesses are also required to offer separate washing and toilet facilities for your family which won’t be used by guests and you may find that this involves quite a lot of unexpected work.

  1. Fitting Out Costs

Furniture and fittings will need to be of good quality to withstand constant use, and soft furnishings and beds etc will need to comply with current fire regulations.

To attract guests in a very competitive UK b&b market, allow enough in your budget to make communal areas like dining rooms and lounges, clean, bright and fresh.

  1. Advertising and Marketing costs

The hardest part of advertising and marketing is to come up with your image and style.  We would advice setting some money aside to commission a graphic designer to come up with a logo and brochure material to give a professional look to your website and promotional materials.

Spend time researching the local market and the search engines, like Trip Advisor, which are likely to be most effective at attracting the clientele you are seeking to attract.

  1. Do you have a b&b mortgage?

If you are thinking of running a b&b from home, you are legally required to advise your current mortgage provider of your intentions.  Most residential mortgages do not allow you trade rooms, so you would need to re-mortgage onto a commercial mortgage –  but don’t worry because our team at Stewart Hindley & Partners can advise you.

There are a limited number of lenders who will allow 1 or 2 rooms to be let on a residential mortgage, but it has to be done in agreement with the lender.  If a lender realises that you are trading on a residential mortgage they can call in the loan due to breach of covenant.

Trading on a residential mortgage can have serious consequences.  You could be forced to re-mortgage and in some cases, if your trade income is not enough to cover the amount of debt involved, this may not be possible. The worst case scenario may be that you lose your home as well as your business.

We strongly recommend that you don’t wait until it’s too late and look to take out a commercial b&b mortgage from the start.

Contact us now for friendly and professional advice based on many years of experience in the bed and breakfast and hospitality finance sector.

Sources:

http://www.startabedandbreakfast.co.uk/b-and-b-how-do-i-convert-house.html

Top tips to keep a family guesthouse business running smoothly

Many guesthouse businesses are run by partners and families, which means family conflicts can often arise. So, we have put together some useful tips, or guidelines, to help you avoid the most common family business blunders:
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What’s the secret of the great British B&B?

British Bed and Breakfasts have never been more popular and in a competitive market, the most popular are the ones with attention to detail, personal service and really make the most of their locations and history to develop their own style.

Look at the Daily Telegraph’s recent Top 10 and the combined selling points that make them stand-out B&Bs:

  1. Cuil an Duin, near Pitlochry, Perth & Kinross

This B&B is praised for its:

  • Beautiful setting – great mountain views, is surrounded by woodland, and set in 20 acres of its own stunning gardens.
  • Attractive elegant rooms furnished with Persian rugs, modern art, flowers and a gleaming Bechstein piano and the bedrooms are luxurious and comfortable
  • Breakfast eggs from the owners’ hens with artisan shops supplying the trimmings
  • Its charming hosts – Sally and David and not forgetting their Jack Russell Teddy and Chloe the cat who stay behind the kitchen door until given the all clear.
  1. The Control Tower, near Walsingham, Norfolk

This accommodation offers:

  • a unique slice of history – a beautifully restored RAF squadron control tower with remarkable modernist and Art Deco detail.
  • House tours include the open roof deck
  • Guests outdoor lunch al fresco in the two-acre wild flower garden
  • Nearby wide beaches of Wells-next-the-Sea and seal spotting trips to Blakeney Point.
  1. Botelet near Liskeard, Cornwall

This offers:

  • The chicest of shabby chic style farmhouse accommodation
  • In a quiet location the end of a wild-flower strewn lane
  • Opportunities to explore the farm and walk the wooded valley
  • A treatment room therapeutic massage in the treatment room
  • A quirky, friendly, artistic and fun vibe
  • Cottages, amazing yurts and a campsite are also available
  1. The Linhay, near Crediton, Devon

  • A peaceful hideaway close to Dartmoor and Exmoor
  • Beautiful setting in an open valley with a running stream with orchard views.
  • Accommodation with a quirky, natural feel to the B&B accommodation in a lovely old barn with its own little kitchen area
  • The owners also run Start a Smallholding courses.
  1. Wickton Court near Leominster, Herefordshire

  • A rambling old place steeped in history – a former courthouse that dates from the 15th century (complete with a wig room)
  • Many local sights close by
  • Cosseting bedrooms with generous curtains and big bathrooms
  • Characterful – with wonky floors and ancient beams; one room even has a wood-burner.
  1. Westbourne House, Cowes, Isle of Wight

  • An elegant Georgian townhouse on the waterfront with stunning sea views
  • Cosy well-dressed beds.
  • Close to Cowes’ attractive High Street full of desirable shops, bars and restaurants
  • Lovely walks along the sweeping promenade.
  1. Waterlock House, near Canterbury, Kent

  • Another stylish Georgian town house
  • Guests get an airy loft apartment on two floors with its own entrance with a vast bedroom/sitting room
  • Furnished with quirky French antique pieces, a painted black and white diamond floor, a sink-into sofa and a very comfortable big bed.
  1. Primrose Hill Farm, near Banbury, Oxon

  • A peaceful spot on the edge of the Cotswolds
  • Farm setting in 80 acres dotted with sheep and horses
  • Immaculate interiors with calm and inviting bedroom, deep beds, fat feather pillows, pretty lamps and vases of flowers
  • Elegant sitting and dining rooms look uphill to the woods
  • A warm welcome from all including Trouble the terrier also helps guests to feel at home.
  1. Ponden Hall, near Haworth, West Yorkshire

  • Huge history – Said to be the inspiration for Emily Bronte’s Wuthering Heights
  • Period style including mullion windows, huge flagstones, period pieces and original paintings.
  • Bedrooms balance luxury and individuality – two rooms have log-burning stoves
  • Lots to see and do – Nearby is the Pennine Way, the steam train at Keighley and the Brontes’ home at nearby Haworth.
  1. Gladstone’s Library, Hawarden, Flintshire

  • Steeped in history – Founded by the politician William Gladstone
  • Not just a B&B, but also a peaceful, restorative retreat: Guests have a choice of 250,000 books in the reading room, silence, space, convivial company if they need it
  • Also offers a programme of optional talks and courses
  • Theatre Clwyd and the city of Chester only 15 minutes away
  • Cosy not Techy – A ‘Roberts Radio’, rather than HD TV, sort of place.

Looking to finance your own B&B?

Do you have what it takes to run a great B&B?

If you are considering starting a B&B or are looking to invest in improving or expanding your existing B&B business, then chances are you will need B&B finance and it makes so much sense to go to people, like Stewart Hindley and Partners, who understand the business through and through.

We are long-established specialists in securing B&B mortgages.  Our experienced team will be able to offer you friendly and informative advice to help you succeed in your business.  Browse our site for case histories and more information about the process involved in securing B&B finance or call us now to speak to our team of experts.

Taking advantage of the Equestrian B&B boom

With many of today’s horse owners looking for different and interesting places to take their horse to ride, there are good opportunities for Bed and Breakfast owners with access to the right facilities to expand their businesses.

If you run a rural bed and breakfast with good riding country nearby and have your own stables and paddocks on-site (or a livery yard or riding centre very close by) then offering this additional service could generate valuable group B&B business for you.

Guests are typically looking to stay close to their horses and in small groups so they can ride with their friends.

Key equestrian B&B features

Key features these customers would be looking for are:

  • Good off-road riding in beautiful countryside and/or good equestrian training facilities. The availability of beach riding is also a big plus because it’s an experience that not all horse owners can normally enjoy.
  • Well fenced, clean grazing
  • Clean and safe stabling and/or shelters in good working condition with water available. You don’t necessarily need that many, but it is useful if the capacity matches your own B&B accommodation for your two legged guests!
  • Somewhere secure to park their horseboxes or trailer and store their equipment.
  • The facility for guests to purchase straw or shavings for horse bedding for stabled horse
  • Local advice/guidance on the best riding routes and access

If you don’t have your own facilities on-site, it would be worth talking to your local riding centre or livery yard to see if they would have spare capacity.  It is important to remember though, that for it to be an attractive proposition to this market, the horse accommodation should ideally be within walking distance, or a short car journey away.

If you think you could meet the above criteria, it could be worth exploring your hospitality finance options to help you invest in equestrian facilities.

How to market your equestrian B&B

The British Horse Society, which is dedicated to improving the lives of horses and helping horse riders to get the most from their relationship run a ‘Horses Welcome scheme’ which is the UK’s first quality-assured scheme for equine bed and breakfast accommodation. Started in the south of Scotland in 2006, it has since grown to include members all over the UK and Ireland. Becoming a member of the scheme demonstrates a commitment to providing a genuine ‘home away from home’ for horses.

Various other B&B listings will also offer stabling as a filter for online searches, enabling horse owners to identify their options quickly and easily

Would your equestrian B&B offering require hospitality finance?

Whether you are looking to expand your existing bed and breakfast operation into areas like this, or are looking at starting a B&B business, the chances are you will need B&B finance and it is worth seeking advice from us here at Stewart Hindley & Partners we specialise in this sector and can provide you with a solution that suits your requirements.

If you want to see how much the loan will cost each month take a look at our online Business Mortgage calculator or call us to find out how we can help.

English B&Bs dominate TripAdvisor 2017 awards list

The humble English guest house has triumphed over its international counterparts to claim five of the world’s top 10 best B&B slots, according to travel giant TripAdvisor.

Bindon Bottom B&B, in West Lulworth, Dorset received the top award, beating competitors in Florida, Prague and Belgium.
Continue reading “English B&Bs dominate TripAdvisor 2017 awards list”

How to find the best Bed & Breakfast finance advice

Ask The Experts At The B&B Show
22-23 February 2017 Bristol

Stewart Hindley & Partners, leading specialists for Bed & Breakfast finance, will be exhibiting at The B&B Show in Bristol later this month.

The Show provides a unique one-stop opportunity for Bed and Breakfast, Guest House, and small Independent Hotel owners to build up their knowledge of the latest techniques, innovations, issues surrounding this industry and to network and meet other people operating in the same sector.
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Did You Know You Can Attend a B&B Course?

When starting a new venture it is always a good idea to get as much information on the area in which you choose to go into.  You probably think that running a B&B or Guest House is fairly straightforward and on the whole it is, however, it is not just cook a breakfast and change some beds.

Continue reading “Did You Know You Can Attend a B&B Course?”