Category Archives: Scottish Finance Case Studies

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.

http://www.arden-house.info/

NC500 Bed & Breakfast

Edwin & Irma had many holidays in Scotland and when they decided to change their lives they chose to move from their home in the Netherlands to Stoer on the North West Coast of Scotland.

It was a big decision for them to make and they wanted to know they were making the right choice so they did a lot of local research on the area and trade in and around The Highlands and eventually found their dream property in Cruachan Lodge in Stoer, which sits directly on the fantastic North Coast 500 route and close to the town of Lochinver.

Whilst all this was happening they were also looking at their finance options and came to the conclusion that they would need help from an experienced broker. They chose us here at Stewart Hindley & Partners to work with them and to source the best deal available for their circumstances.

We worked with Edwin & Irma for a few months looking at various property details and their accounts and gave them an unbiased opinion on their finance options. There were lots of emails back and forth and Edwin & Irma came over to Scotland in November 2017 and viewed a number of properties, eventually deciding on Cruachan Lodge which was a former manse and had a good historical trading history.

Once their offer was accepted on Cruachan Lodge we worked with both them and the vendors to get the deal done. Due to Edwin & Irma’s location in The Netherlands the initial bank meeting was carried out using teleconferencing which enabled the bank to carry out their due diligence and submit the case to their credit team. The deal was eventually approved (subject to valuation) and a commercial valuation was undertaken. There were some details which needed to be addressed post valuation and having agreed the details completion was set for 1 March 2018.

Edwin & Irma have now moved into their new home and are looking forward to welcoming guests from Easter 2018.

Cruachan Lodge has been re-named to The Green Cruachan which reflects Edwin and Irma’s commitment to green, sustainable living. They are offering a warm welcome, comfortable luxury accommodation and a healthy vegetarian breakfast to their guests and are looking forward to welcoming guests.

What Edwin & Irma say:

“We would like to thank Stewart, Hindley & Partners, and especially Carol for all their time, the nice telephone calls, emails. They always gave us a quick reply if we had questions, they helped us with all the figures of the B&B’s we were looking at. It was lovely and supporting to have Carol with us during our call with the RBS, all the advice, their ideas about the properties. We felt that Stewart, Hindley & Partners were there for us, for our best interest. We really felt supported and loved. The way of contact was Professional and personal.”

https://www.thegreencruachanstoer.com/

Park View B&B – Glen Coe on your doorstep

Johnny Buckland had been running the Park View B&B in Ballachulish for a few months as a leaseholder and the opportunity arose for him to purchase the freehold and make the property his own.

Johnny recognised the value in using a specialist Finance Broker and decided to contact us at Stewart Hindley & Partners. After some initial discussions it was decided the best way forward was to release some equity he had in another property to help with the deposit for the purchase and to have a commercial mortgage for the rest of the purchase price.

We were able to recommend a residential broker who helped him with his equity release which enabled him to proceed with his commercial mortgage application. During the process the vendor requested regular updates which we provided on a 2 â€“ 4 week basis.

Park View B&B is located in the beautiful Glen Coe area of Scotland which is a stunning area for walkers, skiers and general sightseers. The B&B offers comfortable rooms at reasonable prices and Johnny has a wealth of hill walking and mountaineering experience he is keen to share with you. He is happy to provide general safety advice or a range of walking routes to suit all abilities, staying at Park View gets you a little added value!

http://www.parkviewbnbscotland.co.uk/

Scottish B&B – A Great Opportunity With Challenging Trade

Gary Hack and Nigel Robinson decided they wanted to run their own Guest House business and started to look for a suitable property. They had no idea how difficult it would be. After looking at a number of properties, they eventually found, and fell in love with, Ivybank Guest House in Blairgowrie, Perthshire.

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Hotel Business Recovery Aberdeenshire

The Objective

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 Solution

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 Result

The owners were then able to continue trading under a new structure affording them a fresh start, without the inherent, historic debt burden.

Comments

“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.

Hotel Business Recovery Perth & Kinross

These clients had been experiencing difficulties with the payment of VAT and PAYE due to a decline in trading and a slump drop in visitor numbers to the locality. Our clients were also under pressure from their bankers as they were in breach of their debt service covenants and as a consequence were at risk that their bank would call in their loan.

The Objective

Hospitality Business Recovery specialist, Stewart Hindley LLP, was approached to liaise with HMRC with the aim of agreeing a realistic debt repayment structure based on their ability to pay down debt over an agreed period of time.

The Business Recovery Solution

Stewart Hindley assigned a Senior Partner to take direct responsibility for liaising and negotiating with HMRC to reach a consensual agreement to meet the VAT and PAYE arrears.

During this process Stewart Hindley also liaised and worked with their clientâ€™s bank on a financial restructuring solution to support their hospitality business and debt to ensure that they could meet the historic debt.

The Result

Moving forward, the business was able to meet its current and future obligations to the bank and other creditors and improve its revenue and cash flow.

Comments

“Our previous accountants had no real understanding of our trade and had failed to advise us of an appropriate trading structure should we be unable to meet our liabilities. As a consequence we almost lost our business and our home due to debt collection measures from HMRC.

Stewart Hindley resolved our situation within a matter of weeks. Without their support we would have lost everything!”.

Scottish hotel finance case study

The Objective

Ian & Rena Watson relocated back to Scotland from Bermuda with the aim of capitalising on their previous experience as hotel owners and operators in Scotland by purchasing another concern.

After viewing several hotels that met their requirements they offered on the Cullen Bay Hotel in Moray. This concern offered the Watsons the opportunity to develop the trades, particularly Weddings and Functions.

The objectives were:

To secure debt on the best hotel loan terms based on Ian and Rena being proven hotel operators, returning to the trade
To secured the hotel finance within a 6 week period, in order to meet a completion date in time to capture the lucrative summer trading period.

The Solution

Stewart Hindley & Partners:

Carried out an in-depth analysis of the trading accounts for the concern going back over three years
Compiled a three year profit and loss forecast and comprehensive business plan
Made a submission to the commercial property lenders based on:

The Governments Funding for Lending Scheme
A standard variable rate hotel loan term, that met the lenders debt service criteria
Stewart Hindley & Partners set of adjusted vendors accounts restating the actual trading profit.

The Result

Hotel loan offers were secured from two commercial property lenders with one offering 2% cash back from Governments Funding for Lending Scheme notwithstanding advantageous rates and terms for the period of the loan.
This enabled the Watsons to complete their purchase within the stated time frame, allowing them to:
- Meet the vendor’s target completion date, as well as
- To take advantage of the lucrative summer trading period.

Comments

“Stewart Hindley & Partners worked tirelessly to ensure that our tight timescales were met despite the difficulties of the overall conveyancing process and the lenders security requirements.
“They kept us fully informed throughout the entire process and dealt with every aspect of the transaction, which included the valuation report and agreement of the goodwill and fixtures and fittings apportionment. This, in itself was complex and required a full and comprehensive understanding of taxation and allowances to ensure our best interests were met”.

Ian & Rena Watson
Cullen Bay Hotel

Hotel Finance Case Study – Fortingall Hotel, Perthshire Scotland

A Scottish Tourist Board four star, historic country house hotel, with 12 bedrooms under independent ownership. This hotel is a cinematic landmark, having been the location for the filming of the famous 1959 movie, The 39 Steps.

The Objective

This proven hotel operator, with a track record of successful hotel management elsewhere in Scotland, was seeking to raise hotel finance to assist with the purchase and to maintain and develop the hotelâ€™s traditional and historic connections.

The Solution

An initial meeting with Stewart Hindley & Partners ensured a real understanding of their financing requirements and analysed the advantages and disadvantages of the different hotel finance options that would be available to them given their circumstances.

Stewart Hindley & Partnersâ€™ track record in hotel lending, provided un-paralleled access to prime and specialist lenders throughout the UK ensured that the owners of the Fortingall Hotel had a funding solution that met their immediate and future mortgage funding requirements.

The Result

A decision in-principle loan offer, subject to valuation, was secured within 72 hours from receipt of the clients supporting information together with a business and marketing plan which included revenue and cash flow projections all compiled by Stewart Hindley & Partners.

A transaction date, of six weeks ahead, was set and the target date met.

Purchasing the freehold freed up enough working capital for the new owners to invest in on-going refurbishment. The Hotel has since received excellent reviews on Trip Advisor with many comments on the beauty of the building and tasteful decor.

Comments

We were recommended to Stewart Hindley by other hotel operators and key professionals within the hospitality sector . We had used other brokers in the past but all in all found these to be quite a mixed bag. First impressions were encouraging – we ran several hotel loan options through Stewart Hindley before arriving at a target purchase. Their input throughout the process was first class â€“ incisive, sharp and immediate.

Thanks to Stewart Hindley, our project won support from the banks . Their preparatory work set us on the right course with an appropriate lender. Good relationships were forged at an early stage and credible honest assessments presented on the potential of our proposed hotel investment . This helped hugely. Winning the trust and confidence of backers in the current market is the key to success and Stewart Hindley have the skills and light touch to achieve this.

Their support and interest did not dry up on completion of our deal. They have stayed with us – maintaining contact and providing encouragement . We will most certainly be considering further projects with Stewart Hindley in the near future – they have given us the confidence to grow.

Robbie Cairns, Proprietor of The Fortingall Hotel