Many clients are attracted to the idea of buying a hotel, whether as a retirement venture or a new career. There are over 50,000 hotels in the UK* and so there is a lucrative market in providing commercial mortgages for these clients.
Often mortgages are available not only for purchasing but also for refinancing, debt consolidation, and refurbishment of the hotel. Due to the amount of hotels, and the attractiveness of buying one, lenders are typically keen to see a business plan with clear forecasts of profit. In addition lenders would want to see some, if not all, of the following: proof of identity; three months’ personal bank statements; three months’ trading bank statements; a business plan; and proof of experience. These variables, like with a pub, often determine the LTV ratio of your mortgage offer.
For clients wishing to buy a hotel, the repayment options are numerous. There is the option to have fixed rate or variable loans, and also the chance to pay back over a period ranging from 15 to 25 years. The important thing is, like with a pub, to have a clear understanding of why you believe that the hotel you are buying it profitable and to have a clear business plan which will clearly show lenders how you intend to meet the mortgage repayments.
*According to The Catering and Hotel Keeper Report published on their website.