It was an aspiration of Alec and Julia to own and operate a bed and breakfast business. It is not always easy to get finance as a “new to trade operator” so they decided to use a broker. Because Stewart Hindley & Partners specialise in the hospitality sector and understand the needs of all parties involved they decided to work with us to secure their perfect property.
The property was The Beaches Guest House in Scarborough which had been operated on a limited basis as the current owners were looking to focus on other businesses they owned. This presented an ideal opportunity for Alec & Julia to purchase a going concern with lots of potential to increase the trade and give them the lifestyle they aspired to. Because of the limited trading of the concern we had provided a comprehensive debt proposal which showed that the expansion of the trade was viable as well as providing realistic projections for the business. This was backed up with local statistics and re-profiled Profit & Loss accounts for the current trade. By presenting the information in a way that the lender can easily process it, it gives the lender a clear “picture” of current and future trading and our clients the best possible chance of getting the loan they require.
The Beaches is a 7 bedroomed guest house which is located close to the North Bay area of Scarborough. It is an idea location to visit the popular, award winning Peasholm Park and is around a 5 minute walk to the North Bay, and 20 minute walk from the main harbour and beach area.
From March 2016 Alec and Julia will be providing a warm welcome to guests. Look out for future innovations at The Beaches, Julia is a qualified Art teacher and will be offering courses to guests and locals over the quieter winter months.
A quote from Julia and Alec:-
“After deciding that now was the time to make the change and do something for ourselves, and making sure the numbers added up we set about trying to get a commercial mortgage.
Our first port of call was our long term “regular” bank who were less than useless, as we found were other higher profile lenders! Determined to not be put off by it, we searched the internet and Stewart Hindley & Partners were there. After an initial chat with Carol the ball quickly started to roll, and, after 2 months here we are eagerly awaiting the keys to our new lives!
Carol was a joy to deal with and always at the end of a phone or an email, and Chris provided very insightful tips and information throughout.
We wish to thank them for all the help and information they’ve put our way.”
The Elton Guest House is located in the popular town of Grange over Sands and is close to the Lake District National Park and Morecombe Bay. Over the last 2-3 years it has been traded “quietly” which suited the owners’ lifestyle. Our clients saw the potential of the Guest House and decided it was a perfect property for them to start their own Guest House business.
The Argyll Hotel opened in 1755 and is located at the entrance to Inveraray Castle in the historic Scottish town of Inveraray. The town’s location on the shores of Loch Fyne means it is a popular destination for international and domestic tourists.
Our client, The Byrne family, approached us for assistance in raising bank finance for the acquisition of the Argyll Hotel. The family intended to expand their business through this acquisition, adding the hotel to their existing Best Western-branded hotel in nearby Crianlarich, just north of Loch Lomond.
The lead director of the family’s hotel company, Mr Geaspar Byrne, is based in the Far East, necessitating many early morning Skype calls for the team. These calls were instrumental in ensuring a good flow of communication between our client, us and the lender. This is always an important factor when pulling together a high quality business plan. For Stewart Hindley & Partners the relationship with our clients is the most important thing and the satisfaction of being instrumental in helping a client achieve their goals makes all the effort worthwhile.
One of the challenges for raising finance was to convince the lender that the synergy between the hotels would be a profitable one and that with good in-house management both hotels could benefit from bulk purchasing and centralisation of operating systems. It was also important to show that our client was not only experienced within the hospitality sector but that the plans going forward were affordable, doable and above all manageable. Happily, all this was successfully achieved and we secured competitive financing terms on behalf of our client not only for the Argyll Hotel acquisition but also for a complete refinancing of the Crianlarich Hotel.
Upon completion of the transaction, the family conducted a re-branding exercise and the new hotel is now trading under its original name of The Inveraray Inn.
Geaspar Byrne said: “We as a family are thrilled to be the new owners of The Inveraray Inn. This historic hotel is one of the most iconic hotels in the West of Scotland and compliments our other asset perfectly. We could not be happier with the services provided by Stewart Hindley & Partners and would not hesitate to recommend them to others.”
The City of Gloucester is an historic City located in the Cotswolds and is popular both with tourists and business visitors. Our client, who already owned and operated a hotel in Cheltenham, recognised the need for a niche limited service hotel within Gloucester and set about looking for a suitable property.
A site was found in the centre of Gloucester which suited the type of accommodation our client wanted to offer. After liaising with the local council and being satisfied that the council supported his plans the next step was securing the finance with which to purchase the premises. That’s where Stewart Hindley & Partners came in, we had previously worked with the client on another project and he was happy to work with us again on this one knowing the level of commitment we give to each case and the professionalism we provide on the debt proposal.
The finance was a challenge in that limited service hotels are a fairly new concept in the UK and the lenders were initially reluctant to lend, however, we presented a comprehensive business plan together with his current trading accounts and projected accounts which provided them with all the information they required providing a level of confidence which is sometimes lacking in non-professional applications.
Meetings between the lender, Stewart Hindley & Partners and the client were conducted on and off site and all queries were answered. With the help of our client we were able to show that Gloucester City Council had a strategic plan for the town as a whole and that a new shopping development would enhance the need for this type of hotel, as well as the need for a cost effective business travel solution. Ultimately the lender was happy to offer debt at 65% LTV at a great rate of 2.35% gross over a 20 year period. The deal has now gone through to completion.
What is a Limited Service Hotel?
A limited service hotel is one that provides a good standard of accommodation with basic self -catering facilities in the rooms i.e. tea/coffee making equipment and microwave. There are no bar or restaurant facilities on site. As this particular hotel is based in the centre of the town it is easy for guests to visit restaurants and other food outlets if they don’t wish to cater for themselves. By offering a limited service the hotel is able to provide a good standard of accommodation, in a town centre location for a budget price.
Forest How Guest House is situated in the beautiful Eskdale valley in Cumbria. It sits within 5 acres of countryside and provides guests with a natural wildlife show daily. You can often share your breakfast with red squirrel, deer and a host of different birds!
What is a Bunkhouse?
A bunkhouse is similar to a hostel in that it has shared rooms which are basically furnished. They are used by people who love the outdoors and want to stay in more remote areas. The term bunkhouse can be used for anything from a simple camping barn to a hostel offering double beds and a cooked breakfast. The Corran Bunkhouse probably stretches this definition as there are no dormitories & all the rooms are private, with televisions and en-suite bathrooms.
Ideal Scottish Location
Corran Bunkhouse is situated on the West Coast of Scotland in the village of Onich, Fort William and it caught the eye of Alan and Halina Hood when it came up for sale in 2014. It was originally a guest house but now operates as a 32 bed bunkhouse predominantly for the self-catering traveller. It sits next to the Corran Ferry which crosses Loch Linnhe from Nether Lochaber to Ardgour, at the Corran Narrows, nine miles south of Fort William which is an ideal location for holidaymakers in this part of Scotland. With the Nevis Range, Mamores and Glen Coe all on the doorstep and the Ardgour / Sunart/ Ardnamurchan wilderness straight across the ferry, this is a paradise for walkers, climbers, cyclists, kayakers, skiers & anyone else who loves the outdoors & wildlife. This is Lochaber – the self-proclaimed outdoors capital of the UK & the Corran Bunkhouse is centrally placed within it!
Financing the Bunkhouse Purchase
After looking at the property and deciding they wanted to make it their home and business Alan & Halina started to look at ways of funding their dream. It was suggested to them that they contact us here at Stewart Hindley & Partners to discuss their options. Alan had a clear vision of how he wanted to improve and operate the business and by working closely with our team a suitable and affordable debt solution was found. The reality, now that Alan & Halina have been proprietors of the Corran Bunkhouse for over two months, is exceeding their expectations – they have made a quality investment that gives them plenty of opportunities for growth in the future.
We submitted the application to the lender together with a comprehensive business plan and were offered the debt (subject to valuation) within two weeks. This was a complex property transaction, involving purchasing of shares and a special purchase vehicle (SPV) and the loan offered took account of these circumstances. This did take longer than we had hoped but eventually it was all done and everyone was heading for completion. Unfortunately, one of the owners was then taken ill and died. Understandably, Alan and Halina didn’t want to cause the family any undue stress and the purchase took a bit of a back seat until the situation could be reviewed. It was agreed that the sale would still go ahead and that Alan and Halina would operate the bunkhouse under a management agreement whilst probate and legals were undertaken. This was a stressful time for all concerned but they have now completed their purchase and are very much enjoying life in Scotland.
We are very satisfied with the support that we received from Chris and Carol at Stewart Hindley. Always professional, Stewart Hindley were helpful and proactive in what turned out to be an unusually difficult process. We were truly grateful to have them on our side and we believe that they added a lot to the success of the project, especially in keeping the loan on the table during the delays! Certainly our recommendation to anyone considering doing a transaction like the one we did would be to use Stewart Hindley – definitely a very competent & committed team that is client focused!
Alan & Halina Hood – Corran Bunkhouse
About Glenshieling House
Glenshieling House sits on the edge of the Scottish town of Blairgowrie which is an ideal location for visiting the many attractions that Perthshire has to offer. It is a grand house and lodge sitting within its own grounds. Built in 1893 it is grade C listed for its local architectural significance.
About Melrose Guest House
Melrose Guest House is situated in the popular seaside town of Whitby in North Yorkshire. The house is a grand Victorian property which has been upgraded to a high standard. It is close to the seafront, just 100 meters away, and is only 600 meters from Whitby town centre, making it an ideal place to stay when visiting Whitby and the surrounding area.
Buying a Guest House
After working within the Guest House sector David and Emma felt they had gained enough experience to enable them to realise their dream of owning and running their own business within their home town. Although both David and Emma had worked in guest houses, they also researched the market with the help of the internet to gain a complete understanding of how a guest house operates and to source a financial broker who specialised in bed and breakfast and guest house finance.
Arranging Guest House Finance
Stewart Hindley and Partners were identified as having the appropriate financial and operational experience of the sector and were duly instructed to source competitive finance to assist with their purchase from a prime lender who specialised in guest house finance and guest house mortgages.
One of the challenges they encountered was that the concern was not being traded to its potential by the current owners, which indicated that the trading accounts didnâ€™t reflect the true potential of the business and the ability to service debt.
In order to meet the lenders requirements our case team assessed the trading accounts and in conjunction with David and Emma, produced a set of projections for the first 3 years of trade under their ownership which proved to the lender that the business could service the debt and importantly provide an income for them.
After the business valuation was completed, with the support of Stewart Hindley’s financial appraisal, the lender offered the loan on excellent terms – a great day for David & Emma! Since completion and taking over the business it has been non-stop for them with great reviews on Trip Advisor and many guests will undoubtedly be returning to the Melrose Guest House.
Quotation from David & Emma
Having approached the high street lenders and our local broker we were firmly met with a brick wall. After a little research online we decided to give Stuart Hindley a call. We spoke with Chris who explained the process and within 24 hours we had a decision in principle. The terms were far better than the deals we had initially applied for with the high street lenders.
From start to finish Carol and Chris were extremely helpful, friendly and a pleasure to deal with. All e-mails were answered promptly, phone calls were usually answered and where messages were left return calls were received without delay (so rare these days).
Thanks to Carol and Chris for allowing us to achieve our dream, we will call you once again when we make our next purchase.
David and Emma
Melrose Guest House
From its wonderful location in the heart of the village of Abersoch, The Wylfa Guest House boasts a superlative position close to the beach and just a stone’s throw away from the Abersoch Golf Club.
The owners were referred to Stewart Hindley & Partners as hospitality business recovery specialists by a leading commercial property agency in Edinburgh. They were under considerable pressure from HMRC’s Late Stage Debt Resolution Collection office to make a full and immediate payment of some £400,000 in respect of their arrears, or face legal recovery action in the Sheriffs Court (with the prospect of having their assets seized to settle the debt). The owners were unable to make the payment so called in Stewart Hindley to manage their business recovery.
The Stewart Hindley team immediately undertook:
- a Creditors Voluntary Liquidation process to halt any further action by HMRC
- a financial restructure of their hotel business, under a new operating entity
The owners were then able to continue trading under a new structure affording them a fresh start, without the inherent, historic debt burden.
“Our professional advisors thought that our situation was unrecoverable and were unable to help. So we had nobody to turn to and faced the prospect of having to sell our hotel, which was also our our home which was part of the bank’s security.
“Stewart Hindley LLP where recommend to us as they have a track record in hotel business recovery. Without obligation we discussed our circumstances and within 48 hours they had come up with a business recovery strategy which enabled us both to secure the freehold of our hotel, release the security held by the bank over our home and to trade without any loss of business continuity. We owe them a debt of gratitude.”
If you would like to know more about our hotel business recovery services, please email us for further information.