Business Support Finance – COVID-19

Launched in response to the coronavirus outbreak, the Coronavirus Business Interruption Loan Scheme (CBILS) is designed to support UK businesses during this period of disruption. CBILS provides the lender with a Government backed guarantee of 80%, against finance offered under CBILS with the balance of risk being held by the lender.

CBILS is designed to assist with cash flow, initially by way of a Capital Repayment Holiday (Interest only period) of 12 months or a commercial loan over 6 years, with no repayments in the first 12 months followed by a 5-year loan facility on a full repayment basis.

CBILS will only be made available to businesses that were deemed “viable pre Covid 19” and as a consequence a “robust” case must be made for your new Capital Repayment Holiday or loan based on your pre Covid trading information.

It is important to note that if your financial and supporting information isn’t presented correctly to meet the lenders requirements, this could lead to a decline for support, which may impact on your existing loan covenants when considered against your lenders’ “prevailing” debt service criteria which may give your lender cause for concern post Covid 19.

During this period of uncertainty, we at Stewart Hindley & Partners are here to help you and have direct access to all the lenders’ that offer CBILS and who are accredited by the British Business Bank. https://www.british-business-bank.co.uk/. If for any reason your business is not eligible for CBILS then we can provide other routes to finance to support your business.

Given the record levels of demand that banks are incurring for general advice and CBILS applications, we at Stewart Hindley & Partners are able to offer, on your behalf, support through our own FCA relationships with all CBILS accredited lenders.

As a result, we are able to deal with the relevant Business Relationship Manager directly, to ensure a prompt application, with the best possible outcome given your circumstances and thereby take away the uncertainty by securing a decision in-principle within 24 hours.

If you’d like to discuss how we can assist you with your CBILS application or any other funding requirement during these challenging times, then please don’t hesitate to get in touch with us either via completing the contact form or by calling us directly on 01488 684834.

How To Turn Your Home Into a Guesthouse

Running a guesthouse can be rewarding and fun, not to mention a great way to make money from your property without having to sell it.

However, it’s important to keep in mind that running a guesthouse is a big commitment, and there are rules to follow and standards to meet.

Here are just some of the things you need to consider if you’re thinking of turning your home into a guesthouse.

Starting a guesthouse business

Get The Relevant Permissions

Before you can open your guesthouse, you’ll need to acquire the relevant permissions, so your first step should be to contact your local council to see what is legally required.

If you’ll be carrying out building work on the property, you may need to apply for planning permission. Regulations change frequently and vary depending on where your property is located, so be sure to check in with your local planning office.

Even if you aren’t making any structural changes to the property, you might need to complete a change of use application before you can open your home as a guesthouse. Again, ensure you check these details with your local council.

You’ll also need to comply with fire and gas safety legislations, as well as food standards if you’re planning on serving any meals on the premises.  Find out more by contacting your local environmental health department.

Finally, make sure you contact your mortgage provider and insurer. You may need to update your policy and will need to switch your existing mortgage to a commercial mortgage.

Fit Out The Guest Rooms

Once all the relevant permissions are in place, you’ll need to ensure that your property is up to the job of hosting visitors. That means properly furnished bedrooms with facilities including WiFi, TVs, storage space, and tea and coffee making facilities. Today, most guests will also expect their room to come with an en suite bathroom.

If you’re offering breakfast or other meals at your guesthouse, you’ll need a dining room where your guests can comfortably enjoy their meals.

Finishing touches such as bathrobes, slippers, and washing products can go a long way to ensuring your guests have a memorable experience.

Market Your Guesthouse

If you want to promote your guesthouse effectively, a good website is essential – make sure it’s responsive on all devices, appealing, and optimised for search engines such as Google. Social media platforms like Facebook and Instagram are also useful ways to market your guesthouse successfully.

Running Your Guesthouse

Running a guesthouse can be immensely enjoyable and rewarding, but you’ll also come up against several challenges.

One thing to always keep in mind is that this isn’t just a hobby, you’re running a business and it’s important to approach every aspect of your guesthouse with a business mind to ensure that it is a success.

That’s not to say you shouldn’t have fun! Part of the attraction of running a guesthouse is the interaction with guests, building lasting friendships and ensuring visitors get the most out of their stay.

Running a guesthouse is flexible – you can choose when you want people to stay and when you’d rather have the space to yourself. But it’s important to set boundaries if you want to avoid working 24/7 and burning out. Have house policies in place, including setting out the times breakfast will be available and when reception service will be provided.

Get In Touch

If you’re thinking of turning your home into a guesthouse, get in touch. We can help you find the most effective way to re-finance or release capital to launch your guesthouse.

6 Things You Need To Know Before Buying Commercial Property

Guest Blog

In most circumstances, buying property can be considered a sound investment. This applies as much to commercial property as it does to a domestic property purchase. But in the same way that you would not buy a private house until you had gone through all the checks and put everything in place ready to make an offer, commercial property also requires that you attend to certain preliminaries before making any commitment. So here’s a list of six tasks which should definitely be on your to-do list.

  1. Does this property meet your business needs?

It’s true that a rental property may offer a business a certain extra degree of flexibility, but the downside is often that the business owner has little control over future rental costs. By comparison, a property owner agrees mortgage terms at the outset and therefore has much more control over future outgoings. In addition, where business tenants may have limited options to modify their premises, commercial property owners are free to make any alterations their budget (and the local planning laws) will allow.

It’s usually wise to invest in something slightly larger than you currently require. That means you have room for expansion when needed, and there’s always the option to rent out part of a building to generate additional income while leaving yourself some flexibility to make further changes as required.

Remember too to check ‘business basics’ like adequate parking facilities and good access to the transport links your business trading demands.

  1. Is this the most suitable type of property?

Unless you are an experienced investor, don’t buy a commercial property just because it’s an irresistible deal. Commercial property falls into distinct categories such as business offices, retail premises, industrial sites, leisure accommodation and special-function units like schools and petrol stations. As a novice, that means you should always go for purpose-built property and forget any ideas about conversions and/or complexities like possible ‘change of use’ applications.

  1. Have you set your budget?

Your pending commercial property purchase is a business acquisition and thus will need to feature in your business development plans. That in turn means exploring, and fixing, the budget you have available prior to searching the market. And given that this purchase is also a business investment, part of your planning should also quantify what return you would expect for this capital injection, and specify the period over which you will reap the rewards.

  1. Optimise the location

Most high-performing businesses will positively benefit from an optimum location chosen wisely. That means making relevant decisions e.g. about city-centre or out-of-town sites, the location of your potential market, how close you want to be to your rivals, as well as considering the future growth potential of the area.

This is one element where it will pay to speak to professionals such as estate agents and business brokers.

  1. Assess the local property market

To make an informed decision, you will need to check features such as: local commercial property values and pricing trends, property taxes, mortgage interest rates and rental values. This will give you detailed information about how much your proposed commitment might cost, and what returns you might expect. And as regards investment returns, your analysis will be more helpful if it can establish what your short-, mid-term and longer-term prospects will look like.

  1. Check commercial mortgage availability

There is, of course, little purpose in searching for a property if you are not eligible for mortgage funding. This should be considered as two separate issues:

  1. a) gaining acceptance ‘in principle’ for commercial mortgage funding up to a certain amount;
  2. b) securing a commercial mortgage on a property you intend to purchase.

Obtaining a mortgage in principle is largely a matter of having a good credit record and meeting a provider’s lending criteria, whereas agreeing a mortgage on a specified property is likely to involve detailed structural surveys and property assessments.

Here again, it is likely to be in your interests to seek specialist advice in each of these areas, especially given that commercial mortgage providers will require such detailed information to decide whether they wish to quote mortgage terms.

Finding a commercial property

You may find commercial properties listed on different online sites and perhaps be tempted to go it alone armed with your portfolio of information. However, just as in the domestic property market, the input of local professionals and/or those who specialise in your business sector can prove invaluable. They will ensure you find the best property for your needs and secure a good purchase deal which meets your business investment objectives.

By Matthew Hernon is an Account Manager at Dynamis looking after Business Transfer Agents, Franchises and Commercial Properties across BusinessesForSale.com, FranchiseSales.com and PropertySales.com.

What You Need to Know About Financing a Pub Purchase

Many people who run pubs start off as tenants or leaseholders before considering buying a freehold once they’ve built up their knowledge, skills and experience.

Buying a pub and running it as a free house means you will be an independent business without any ties to a specific brewery or company – so you’ll be fully in charge of every decision.

Of course, buying a pub will usually require some form of finance. If you’re thinking about buying a pub, here’s what you need to know about financing a pub purchase.

Commercial mortgage for pubs

Taking out a commercial mortgage is another way to fund your pub. Working in the same way as a traditional, domestic mortgage, a commercial mortgage will be secured against the property and can form up to 75 percent of the market value of the pub.

Commercial mortgages can be surprisingly affordable. Unlike residential mortgages, they do not have standard rates of interest, meaning the lending manager will look at each application on its own merits in order to determine the level of risk involved and set the rate accordingly.

Of course, securing a mortgage that allows you to buy a freehold or leasehold pub naturally involves several different steps to those required to finance a house purchase.

Merchant cash advance for pubs

While a merchant cash advance is not a suitable finance method for funding the initial purchase of your pub, it may well provide an effective solution for covering costs such as equipment or other unexpected expenses, as well as expansion, stock, or renovation.

If you have a sudden or unexpected need for finance to keep your pub running and your customers happy, a merchant cash advance could provide a quick and flexible solution. This type of pub financing works particularly well for pubs that accept credit and debit card payments, as the advance is repaid this way.

Expert advice

If you’re looking for funding to finance a pub purchase, one of the first things you should do is consult a specialist broker who will be able to provide further information about the options available to you, and search the market for the best possible offers.

At Stewart Hindley, we are experts in this sector. Get in touch to find out more or to arrange a completely free, no-obligation consultation.

Everything You Need to Know About Commercial Mortgages

Whether you’re thinking of investing in a property for your business or you want to free up equity from an existing property, a commercial mortgage could be the answer.

Here’s our guide to everything you need to know about commercial mortgages.

What is a commercial mortgage?

A commercial mortgage is a mortgage that is specifically designed for buying or refinancing land or property for business purposes.

Commercial mortgages are typically available to cover 70 – 75 percent of a property’s value, and usually last between three and 25 years. Business mortgage plans differ from standard residential mortgages in several ways.

You’ll likely have to pay a higher interest rate than a residential mortgage and there aren’t generally any fixed rates available. However, in comparison to business loans, commercial mortgages do tend to offer better rates as they are secured against the property.

Is a commercial mortgage right for you?

If you’re a business looking to purchase a property or release value from an existing building, which can then be re-invested into the business, a commercial mortgage could be for you.

There are several benefits to taking out a commercial mortgage, for example:

  • The interest paid on a commercial mortgage is tax deductible
  • If the property increases in value, your equity could also increase

Is it hard to get a commercial mortgage?

Anyone can apply for a commercial mortgage, from small start-up businesses through to large, well-established enterprises.

Of course, like any mortgage, to qualify for a commercial mortgage, you’ll need to pass your lender’s eligibility checks and meet certain criteria. These checks typically analyse:

  • Cash flow and any debts
  • Projected income
  • Your ability to pay a deposit, usually ranging between 20 – 40 percent of the loan amount
  • General income, credit and assets

Just like a residential mortgage, it’s important to search the market for the best possible deal available. What’s more, commercial mortgages are generally quite complex, hiring a specialist broker can help make the application process far easier, while ensuring that you get the best deal on the market.

At Stewart Hindley Commercial Finance, we’re experts when it comes to commercial lending. With extensive market experience and knowledge, we can provide information and advice, and source the best possible deals.

Get in touch for a free, no-obligation consultation to discuss your commercial mortgage requirements.

How To Start A Holiday Let Business

Whether it’s a short break or a longer summer holiday, more and more of us are choosing to holiday in the UK.

As demand for holidays in the UK continues to grow, so do the opportunities available for those considering letting out a property to holiday makers.

If you’re thinking about starting a holiday let business, it can be an exciting yet daunting process. Here’s our guide:

Do Your Research

Before starting any business, it’s vital that you complete your research. So, the first step in setting up your holiday let business should always be to research the market, location and competition.

Points to consider in your research include:

  • Is the location popular?
  • Is there a demand for holiday lets in the area?
  • How much rental income could you earn?

Work Out Your Letting Rates

Your research will also help on pricing your letting rates. It’s important that you get your rates just right – too high and you risk your property sitting empty and too low and your profit margins will be down.

Conduct your research then set your letting rates accordingly. Once you’ve launched your business, you should also constantly review and adjust your letting rates to ensure that they are in line with market trends.

Prepare Your Property

If you want to attract guests and ensure they have an enjoyable stay, you need to make sure that your holiday let is well presented and kitted out with all the expected amenities.

The first thing your potential guests will see is the photos of your property, so décor should be stylish and appealing.

As well as looking the part, your property needs to comply with all relevant legislation and regulations.

Start Your Marketing

Once your property is prepared and your holiday let business is ready to go, you’ll need to start marketing your property so that guests can find you easily and book their stay.

Your business should be as visible as possible online and it’s also beneficial to have an online booking system to make reserving rooms as simple and straightforward as possible.

Find Out More

If you’re thinking of starting a holiday let business, it’s important that you have the necessary funding in place. To find out more or for a free, no-obligation quote, please get in touch.

Thinking of Selling your Hotel?

Thinking of Selling Your Hotel? Here’s How to Know it’s the Right Time

As an established hotel owner, you may perhaps have entertained the idea of selling your business. You may understand that timing plays a part in such decisions. But is now the best time? And how will you even know when that ‘best time’ actually comes around? It’s rarely an easy call to make, so here’s a few things you should consider.

Reasons for selling

Sometimes you may just have to accept the fact that you can’t really control your need to sell. Other aspects of life which cannot be put off may simply intervene. You, or your partner, may be suffering poor health, or you may have to face divorce or some other family crisis. Equally, you may be fast approaching retirement, or have been presented with some need to liquidate your assets which must take priority over your business responsibilities.

More often, as a hotelier, you may notice a relentless downward spiral in profitability. Whilst some owners catch the problem early and are able to take remedial measures, others may find things have gone far beyond any hope of retrieving the situation.

If your accommodation business is performing poorly with little hope of an upturn, then taking the decision to sell may be your best chance of selling at an acceptable price. In such unfortunate circumstances it may be best to salvage what you can rather than risk a further decline.

On the other hand, some hotel owners may recognise that their soundly performing business is presenting them with a golden opportunity to sell on their own terms. A business with a good track record will usually sell for a better price, and often sells far more quickly too. And this is especially so where the owner can show that profits are on a sustained upward trajectory.

Research the market

To determine your sale prospects, or even simply to optimise the outcome once you are nearly ready to commit, it will always pay to carefully research the market. Whilst that is likely to involve seeking professional opinions, it should also involve a thorough personal investigation. It’s only by immersing yourself in such detail that you can get a proper ‘feel’ for market conditions.

For instance: Are local sector trends a reflection of regional market conditions? Or are there local factors which are exerting a stronger influence? And considering the national picture: What do the long-term sale statistics say about the future prospects for the hotel industry? And what seems to be the optimum time of year for selling with a view to securing the best return on your investment?

The hotel industry is one that fluctuates and so you will need to keep a careful eye on what the future trends are. There are three main factors that will impact the value of your hotel: the profit that your business is making, what multiple of the profits the buyer is willing to pay and the condition of the business. Make sure that you are in a positive position with all three of these factors where possible if you want to make a good return on your investment.

Threats and opportunities

You may know some local owners are about to retire and close down, or be aware of plans for major leisure and tourist developments about to occur in your area. Indeed, such information may be just what you need to hear to give you an ideal chance to present your business as being rich in potential.

Or alternatively, you may have been advised that a national hotel chain has earmarked your town as a likely location for expansion, or perhaps you have lost some of your best staff who have proved well-nigh impossible to replace.

Whatever the scenario, if a hotel sale could be on the horizon, you must remain alert to how such developments could affect your prospects.

You should also identify whether there are areas where your business could expand in the future so that buyers can be promised the chance for expansion. Is there is the potential for more rooms to be added? Could a restaurant or spa be included as part of the business?

Assess what pre-sale preparation is required?

If you can afford to sell when you’re ready, you should also consider what pre-sale preparation will be necessary to get your business up to the mark in order to prepare for a listing. If you have a well-run hotel in good health with strong bookings, perhaps also supported by strong local patronage, you must also have the evidence to prove the worth of your business.

One extremely important element here is your business paperwork, which must be in excellent order. Any serious buyer will never take your word alone. They will wish to see historical evidence of your trading revenues, and much else besides.

Have clear documentation of the occupation rates and how this fluctuates during the year. You will also need to do an audit of the stock that will included at the time of handover of the hotel.

In addition to exemplary paperwork, your premises should be in good repair and decorated to a good standard throughout. But beyond maintenance, and just as important, you should ensure your hotel is equipped in a way which reflects the latest industry trends and emerging technologies.

This extends beyond micro-details such as contemporary coffee facilities in your rooms, and should certainly include an overhaul of your (hopefully) mobile-friendly hotel website as well as your booking systems and digital marketing strategy.

By Matthew Hernon is an Account Manager at Dynamis looking after Business Transfer Agents and Franchises across BusinessesForSale.com and FranchiseSales.com.

Commercial Property Finance – Invest in your Business

The Federation of small businesses reports that there were 5.6 million small UK business at the start of 2018, and the UK real estate market is still a very desirable investment. The appeal of owning commercial property, whether to run a business from it, or rent out the space is keeping the UK commercial property finance market a highly competitive industry.

There are many types of commercial property finance, and many factors that influence the type of lending required. Industry, length of term, size of business and client risk profile are all aspects that potential commercial lenders will assess.

Anyone can apply for commercial property finance from small start-ups to large established businesses. Some lenders are more specific to the industry for example; hospitality or retail and can offer more specialised plans depending on the property investment and circumstances.

Adaption and flexibility

Commercial lending has had to adapt in recent times as owners and tenants are demanding more flexibility. Commercial office space in particular has had an influx of people looking for flexible working spaces. The evolution of “hot desks” and remote working requires owners to provide shorter leases to tenants.

The commercial property finance industry has had to meet the changing needs of commercial property investors, moving away from very rigid lending solutions and offering more customisable commercial lending options.

Owner vs Tenant

The commercial property market is not just for investors. When owning and operating a business there are many reasons to consider commercial property finance and purchase a building as opposed to renting a space.

Depending on the type of commercial property acquired, mortgage payments may not differ greatly from rental payments. Property prices are frequently rising so there is always the opportunity for capital gains and a premises could experience a significant increase in value over a short time.

Expert Advice

Working with a broker like Stewart Hindley is advisable when considering commercial lending. Extensive market knowledge means they can source the best deal available and offer expert advice on how to proceed. Commercial property finance can be quite complex and it is important to have a strong understanding of what potential lenders may need and how to present an attractive proposal to successfully secure commercial lending.

Stewart Hindley Commercial Finance can advise the type of funding you are likely to need following a no obligation consultation and suggest the best approach.

Get in touch today to discuss options available.

When do you need a commercial mortgage?

One question we’re often asked is, ‘when do I need a commercial mortgage?’

The simple answer is that if you are looking for a commercial premises, either for an office, a shop or even a manufacturing unit or workshop, and you, like most people, can’t afford to buy premises outright, then a commercial mortgage is what you’ll need.

Aside from investing in a new property, you may want a commercial mortgage if you are looking to extend a premises or refurbish or update a property.

What is a commercial mortgage?

Funds borrowed against a commercial mortgage are protected with the bank having a registered interest in the property in the same way that your domestic mortgage would.

Why can’t I just borrow against my existing mortgage?

It’s essential that when you are borrowing for a business, you borrow against a commercial mortgage because borrowing against a standard domestic mortgage could mean you are risking your home and your business.

A commercial mortgage works differently to a standard mortgage. Decisions to approve a commercial mortgage will take into consideration your business plan, expected returns, and also the way in which the property will be used.

Commercial mortgages can be more generous than domestic mortgages, but you will need a decent deposit of 2030% or more.

That’s not all, you’ll also need to convince the lender that you know what you’re doing.

Ideally, you’ll have some proof of experience in the sector. You’ll need a good personal credit history and, if you already run a business, the lender will want to see your trading accounts to make sure you’re responsible with your cash.

They’ll also expect a comprehensive debt proposal. It’s not easy to secure a commercial mortgage but if you know what lenders are looking for, and have the information that they need available, you can substantially boost your chances of a positive response to your application.

You can also get specific sector mortgages too, such as hospitality mortgages, which are designed to support investors in that particular niche. Often their documentation and information requirements are slightly different, reflecting the nuances of that industry, but at Stewart Hindley, we have a team of specialists available to help you jump through the paperwork hoops and get the best chances at securing the right mortgage for you, whatever you need, whatever industry you are in.

To speak to our experts and find out more about how they can help you to find and secure the right commercial mortgage, or hospitality mortgage for your business, call us today on 01488 684834.

How a B&B Commercial Mortgage makes good financial sense for your B&B business

With New Year around the corner, many of us start to think about what we want out of the year ahead.

The prospect of being your own boss and running a lifestyle business from home definitely has its appeal and a B&B Commercial Mortgage can help you to make that dream a reality.

New Year offers a new start, a chance to take the first step towards achieving those dreams and creating the life that you want. Whether you’re looking for freedom from office politics, or whether you’ve always dreamed about being the hostess with the mostess and creating a welcoming environment in your home for tourists and holiday makers, or whether you just want another income stream, a B&B could be exactly what you are looking for to take control of your own lifestyle and work from home.

One of the first things you’ll need to consider is B&B Commercial Mortgage finance. You’ll need capital to invest, but it’s likely that beyond a deposit, you’ll need B&B finance to bridge the gap.

Why B&B Finance?

If you’ve already got a mortgage on your existing home and you’re planning to borrow against it, you may want to reconsider. Using a standard residential home mortgage can lead to your mortgage debt being called in early if you are making an income from letting rooms in your property.

If your mortgage debt is called in early, you’re then faced with a challenge – either find alternative B&B Finance at VERY short notice or lose your home and your livelihood.

Other reasons you might need B&B Finance

Perhaps you already have a B&B that you don’t feel fulfills its potential. Sometimes a small cash injection is just what you need to be able to create the business you want, or to open up new opportunities with what you have.

Often a B&B Commercial Mortgage provider will take into consideration your plans for the business, delivering greater potential benefits at a lower rate than a standard credit card or bank loan might do.

Stewart Hindley & Partners are hospitality finance specialists that can help you find the hospitality finance you need to build the business you’ve always wanted. For more information on how you could benefit from hospitality finance, or to find out how you could raise finance for your hospitality business, contact Stewart Hindley & Partners on 01488 393049.