The Commercial Mortgage: Hotel And Guest Houses | Commercial ...

With over fifty thousand hotels in the UK; the hospitality sector is a lucrative business and as the continuing economic difficulty leaves many struggling to afford the overseas vacation; the demand for the ?at home? holiday has grown excessively.

Whether you are new to the hotel business, or wish to grow your existing portfolio; a commercial mortgage broker can assist in ensuring the possibility of your venture.

The Hotel Mortgage

The hotel business can be broken down into the following sectors:

• City Hotel
• Town Hotel
• Bed and Breakfast
• Country Hotel
• Resort Hotel

For those requiring commercial finance for one of the above mentioned ventures; securing the ideal business loan can be difficult; with many smaller hotels considered risky investments. However, whether you have previously been denied commercial finance or not, a commercial mortgage broker, specialising in the leisure and hospitality industry, will assist in providing a multitude of financial options.

A commercial mortgage broker can assist new and existing hotel businesses with securing financial aid for the following:

• Purchase of existing hotel business/land/new property
• Refinancing
• Refurbishments and business expansion
• Debt consolidation
• Auction purchase

For those in need of commercial finance for a hotel, a qualified mortgage broker can assist in securing the right lending options.

The Hotel Mortgage: The First Step

For those setting up a hotel business for the first time, the leisure industry is difficult which is why, if you are to receive the financing you require to kick start your project; you must have a solid business plan, projections and an understanding of how your business will attract and retain the customers you will need to achieve lasting success.

• Type- What type of hotel are you establishing? Is it low budget accommodation ideal for a short night stay, a luxury family resort complete with all the amenities or a couple?s only, guest house? Understanding the type of business you wish to establish, the service you wish to offer and the customers you wish to attract will be the first step to your business plan.
• Location- This can often be greatly dictated by the type of hotel you wish to establish. Does your location have a need for your hotel? Will it appeal to those visiting the specific area? Will you be in a position to fulfil the needs of your customers? Location will play an important part in the success of your venture, thus it is wise to consider your options carefully.
• Why- Ask yourself, why your customers will choose your hotel? Do you offer everything they would desire? Will your hotel be able to cater for your customers, effectively?
• Business Plan- This is a crucial part of the business, and by taking in the above points; will determine the success of your commercial mortgage application. Does your plan outline every detail and financial need of your business? Are your projections accurate?

The above points are just a few of the initial steps required to be undertaken by the hotel entrepreneur however, they may also be the questions asked by commercial lender in determining the capability of your business and in effect the success rate of your mortgage application.

The Hotel Mortgage: Financing ?

If the ideal location has been sought then, obtaining a commercial mortgage will be the next step for your business venture.

With high street lenders continuing to reject business proposals, the alternative lender is now considered the ideal source for commercial finance.

When commencing your commercial mortgage application process, you may need to supply the following information:

• Proof of identity
• Trading accounts
• 3 months personal bank statements
• 3 months trading bank statements
• Business plan
• Proof of experience

The above specifications may vary from lender to lender however, they will be used by your chosen commercial mortgage broker to determine the LTV ratio of your business. The LTV ratio is a term in which lenders determine the risk value of a borrower; the lower the percentage, the greater the chance for a business to achieve the desired lending.

If a commercial mortgage broker determines that the LTV ratio is acceptable; then they will scour a specialist database to secure the ideal lending and based upon the agreed terms (fixed rate and variable, are amongst the options) your commercial mortgage may be agreed for up to twenty five years.

For those who are beginning 2013 with a new hotel business venture, those who wish to minimise the struggle of their existing business or those who simply wish to access funding for growth and expansion; a specialist commercial mortgage broker will work for your business to ensure only the ideal financial solution is obtained.

Why not contact a mortgage broker and begin your commercial application process today?

Source: http://www.charlestonfinancial.co.uk/the-commercial-mortgage-hotel-and-guest-houses/

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