Category Archives: UK Finance Case Studies

Capri GH

Bed & Breakfast Dream Come True in Llandudno

Lee Scott returned to England with the ambition to own and operate his own guest house.  He found the perfect property in Llandudno, close to the Great Orme Railway and town centre so he made an offer and it was accepted.  The dream had begun to be a reality.

The business had been trading but, in the past year or so, the owners retired and ceased trading the concern.  They did, however, leave the guest house in a state where it could be traded almost straight away with just a few immediate updates to be done which was a bonus for Lee as he could more or less move in and start trading. 

Although there were some historic accounts for the business there were no recent figures.  This meant that the application would be mainly premised on projections, which is always a more challenging position from which to apply for a hospitality loan.  The fact the concern was in a popular holiday destination helped and with Stewart Hindley & Partners’ experience we were able to make a successful application on Lee’s behalf.  We supported Lee with his bank meeting and commercial valuation arrangements and made sure he was kept up to date on progress throughout the purchase.

 Lee has just taken possession of the Capri Guest House (May 2017) and is ready to welcome his guests.  If you want a seaside holiday in North Wales then I am sure you will receive a warm and friendly welcome at the Capri.  You can check out his rooms and rates at www.thecapriguesthouse.co.uk

“Stewart Hindley and Partners offered me a professional, helpful and reliable service, the service they offered was first class from start to finish. Stewart Hindley and Partners drew up a business plan and enabled me to secure a commercial mortgage for purchasing a Guesthouse and pursuing my goal in Llandudno North Wales. Further to the above I would highly recommend Stewart Hindley and Partners to any other small or large business wishing to obtain finances in said projects”

 Lee Scott – Proprietor, The Capri Guesthouse

Scottish B&B - Ivybank Lodge

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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A Great Hotel in Hexham

Roger and Magdalena Davy were used to running a successful, busy gastro pub in the popular area of Richmond in Surrey.  After building up the trade and obtaining excellent Trip Advisor reviews they decided they wanted to move onto a new challenge.

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gloucester11006 med

City Centre Limited Serviced Hotel

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

Mis-selling Could Affect You!

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!

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Hotel Business Recovery – Berkshire Country Inn

The Objective

To assess their situation with a view to undertaking this hotel business recovery.

The Solution

As commercial property finance experts, Stewart Hindley & Partners immediately undertook:

  • a business review, which identified the reasons for the decline in trade and the corresponding loan arrears
  • to present these findings, together with a business recovery plan, to the lender. However, because they were more than 3 months in arrears, the lender regrettably declined to suspend the summons despite a loan repayment schedule based on a secondary debt.

At this stage, the Stewart Hindley team was able to step in to represent their clients in the County Court and had the action suspended.

The Results

  • The hoteliers were able to recover their trading position and to repay their arrears over a period of 12 months.
  • Stewart Hindley & Partners then successfully renegotiated the terms of the client’s hotel loan on a fixed rate basis over a longer term. This ensured the certainty of debt repayments going forward.

Client Comments

“We were constantly managing our cash flow and trying to find ways to repay our mortgage arrears which resulted in a loss of focus on the revenue required to meet our commitments. We had in effect buried our “heads in the sand” when it came to the mortgage arrears.

“It became apparent after meeting with Stewart Hindley & Partners that we were not alone in this situation as they had acted for clients in similar circumstances and had achieved a positive outcome which gave us confidence from the moment we met with them.

“They recovered our business, provided additional secondary debt and importantly dealt with the lender with whom we now have a good and positive working relationship without the costly need for hotel refinancing”.

If you would like to know more about our hotel business recovery services, please email us for further information.

Hotel Business Recovery – Devon Country Inn

These “new to trade” owner operators had regrettably encountered poor trading conditions since they acquired their Country Inn some 18 months previously.

The Objective

The hoteliers made contact with us via our web site as they were encountering difficulties meeting their monthly mortgage repayments and their lender was unable to grant them any further flexibility and were in the process of calling in their loan. A hotel business recovery plan was required to provide a hotel insolvency solution.

The Solution

After contacting and meeting with their lender, Stewart Hindley & Partners agreed to undertake, on behalf of our clients, a comprehensive business review which identified that their overheads, particularly wages, were excessive and that they were trading whilst insolvent. To resolve this situation we implemented the following:

  • an immediate reduction in wages
  • identified the need for improvement in gross margins on food and beverage
  • a web based marketing strategy to improve room revenue attainment

The Results

A full hotel business recovery. We were able to demonstrate to their lenders that our clients could continue to trade the business and meet the mortgage arrears and future payments.

Client Comments

“We were in over our heads and thought that running a Country Inn was similar to our previous care home business. While the lender was flexible there is no doubt in our minds that they would have repossessed our property if we hadn’t had the support form Stewart Hindley & Partners.

Stewart Hindley & Partners continues to offer us advice and support to ensure we don’t get into the same predicament again!”

If you would like to know more about our hotel business recovery services, please email us for further information.

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Hotel finance case study – Derbyshire

The Objective

Chris & Zoe Hipwell planed to relocate back to the UK after 25 years in Los Angeles; they were referred by their commercial agent to Stuart Hindley & Partners as specialists in the hotel finance sector. Working with Stuart Hindley & Partners, they then searched for a boutique hotel that met their requirements. Most importantly it had to be one that was fundable, as Chris & Zoe had no current UK credit history.

The Solution

Even whilst Chris & Zoe where still residing in Los Angeles, After securing a decision in-principle Hindley and Partners was able to:

  • Help identify Hodgkinsons Hotel and Restaurant in the Peak District as a suitable property
  • Secure a decision in principle from a leading commercial lender, finding one that specialised in British Expats wishing to return to the UK to purchase hospitality businesses
  • Source long term finance options based on Chris & Zoe being “new to trade” operators.

The Result

A hotel loan was secured on advantageous terms which allowed for a degree of flexibility whilst they became familiar with the trade. This ensured they were able to meet their loan commitments to the lender and allowed them to concentrate on developing their trade and establish the business going forward.

Comments

Stewart Hindley & Partners dealt with every aspect of the debt and transaction which included the valuation report and agreement of the goodwill and fixtures and fittings apportionment, to maximize our SDLT allowance, whilst we where still living in Los Angeles.

All that was required of us was to meet the lender on our return to the UK and sign on the dotted line! We can’t thank them enough, as it was thoroughly professional process which allowed us to concentrate on relocating back to the UK.

Chris & Zoe Hipwell
Hodgkinsons Hotel & Restaurant