UK Boutique Hotel Refinance

14th June 2022

Islay Robinson

UK Boutique Hotel Refinance
Islay Robinson

Islay Robinson

Key Details: 

  • Introducer: A financial adviser employed by a wealthy individual
  • Client: A UK-based HNWI with various commercial business interests all over the country
  • Scenario: The client and their adviser asked Enness to arrange hotel refinance and development – they wanted us to make this as easy as possible for them
  • Loan Amount: £7.5 million
  • Rate: 5% fixed for five years, 10-year term

An adviser approached Enness looking to help their employer refinance a significant amount from a £15 million luxury hotel and spa development on the South Coast of the UK. The client also wanted to expand the property and improve some spa amenities.

The adviser and the client were busy with various projects. They didn't have the capacity to approach lenders themselves for the refinance and development project. They aimed to get the best rate and maximise what they could borrow. With Enness handling the refinancing, they wanted to focus on other projects.

The hotel had a successful track record in past years but had traded significantly less during the COVID-19 pandemic. The business had only started welcoming guests at pre-pandemic levels in early 2022 after COVID restrictions ended. With reduced trading activity over 2020 and 2021 sales, we knew most banks would be wary of the project. We needed to approach a lender that would consider the net worth of the individual as a whole – not just the hotel. A lender that would look at more than just the past three years' accounts and could see the potential of the redevelopment was critical.

The client and their adviser thought we would approach mainstream lenders. However, we approached a niche lender that the client didn't know. This lender offered the most attractive refinance rates, and they were also interested in supporting the client with their other financing needs.

We negotiated a capital raise of 50% loan to value (LTV) of £7.5 million at 5% fixed at five years with a ten-year term. The client and adviser were delighted, especially given we handled as much of the project as possible for them, keeping their workload to a minimum while opening the door for an onward lending relationship.

Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.

Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.