Many of us have nostalgic memories of staying in a guest house, with hazy summers spent by the seaside or long days exploring the British countryside. Running a guest house can be a great way to make the leap from the usual nine-to-five and earn a good living. Not surprisingly, many people want to buy their own. The only obstacle is how to secure guest house finance.
As guest houses are freehold and offer a good residual residential value, banks view them as excellent security, and so are largely positive about lending. Case in point, the loan-to-value ratio in this sector can be as high as 70%.
Securing guest house finance
The main features of a guest house mortgage are a 15-20 year mortgage term, seasonal payments and a 60-70% loan to property value ratio. To secure a guest house (commercial) mortgage, you would need to submit a detailed application form, plus associated supporting documents. To make your case stronger, you must also provide evidence of:
- A deposit of 30% or more
- Proof of trade or other relevant experience
- Good personal credit history
- Three years’ Vendors trading accounts or strong income projections for start ups
At Stewart Hindley & Partners, we do all the work for you and manage the entire process just as we have done for so many of our past clients.
How we can help you
Stewart Hindley & Partners is an experienced finance broker, specialising in hotel, B&B and guest house finance. We’ve built up a reputation and formed strong relationships with over 100 lenders, meaning we can source the most competitive guesthouse mortgage offer on your behalf (subject to market conditions, your personal circumstances and the market valuation of your guest house).
We’re also part of an established firm of Chartered and Certified Accountants, and so possess the knowledge and expertise to secure a mortgage which fit the needs of you and your new business exactly. Also, as we work on a ‘No Win, No Fee’ basis, our broker fee is only payable once we’ve secured an offer of finance for you.
To discover more about our terms and conditions, or ask any questions, please get in touch. One of our friendly team will guide you through our fee structure and all other costs associated with your business purchase.