Refinancing your hotel or guest house

  • 22nd April 2015
  • News
  • Stewart Hindley

Refinancing is, simply, paying off an existing loan or mortgage using a new loan. This course of action is usually pursued so that a property owner can change the terms of their mortgage, usually to reduce the term, or to switch between a fixed rate and adjustable rate mortgage. For whatever reason you are pursuing refinancing or any other type of hotel finance, you can be assured that our team will help to guide you through the process.

Refinancing can help to improve cash flow if the terms are favourable, giving you more money to invest into your business. For hotel owners, this cash flow injection, no matter how small, can help improve the prospects of the business. It can allow the hotel to upgrade its facilities, or to pay for any vital maintenance work that needs to be undertaken. It can also lead to more favourable financing options, allowing a business to retain more money annually which will help it to grow.

Refinancing, as with applying for a mortgage, is something that needs to be undertaken with care. Lenders need to be willing to refinance, meaning that the lender needs to be assured that the deal is secure and the borrower won’t miss any repayments. The income of a business needs to be enough to cover the new debt, the business needs to be sustainable to service debt and the business’s trading profit needs to service the debt under the lender’s debt stress criteria. These are just some of the criteria that need to be satisfied before a lender will generally consider refinancing.

We can assist you with securing all types of guest house and hotel finance including refinancing, thus giving you a better deal and providing you with a vital injection of cash when it is needed the most. As whole of market brokers, we will do all that we can to secure a favourable deal for our clients.

Stewart Hindley

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