Bridging Loans For Hotels
KP Finance can help you find the best bridging loans for hotels both in the UK or abroad.
When compared to traditional loans, a hotel bridging loan could offer a faster and more effective way to finance any important refurbishments or expansions.
For any essential or timely renovations that need to be made, a bridging loan can offer a powerful short term solution before alternative or larger funding becomes available.
If you are looking for some capital of £1 million, £5 million, £10 million or more, this could be used to restore and upgrade your property for the upcoming busy season or manage cash flow during a challenging time.
To speak to one of our advisors, simply call the number below and would be delighted to discuss some hotel finance options with you.
Samuel Kalms, Director
Why Use KP Finance for Bridging Finance for Hotels?
Founded by Samuel Kalms (inset) in 2016, KP Finance has specialised hotel financing expertise, drawing on more than 30 years of combined experience in the bridging industry in the UK and overseas.
With key relationships built over several decades, we are in a prime position to secure the right lender and funding to assist with your hotel project.
We have access to bridging lenders in the market for all types of structures and requirements and we have the proven track record and ability to deliver an affordable and effective bridging loan for you.
Overview of Terms
- Short-term hotel finance for purchases, refurbishments, and expansions
- Loan terms: 3-24 months
- LTV up to 75%
- Rates from c1%-1.25% per month
What Are The Benefits of Using Bridging Loans For Hotels?
Fast access to capital – For hotels in desperate need of repairs or restorations, bridging finance may offer faster capital than other alternatives or bank options. You can get a decision in principle in 24 to 48 hours and successful applications are often funded in 1-4 weeks. Whether it is the quiet season or the busy season, this injection of cash could prove vital for your hotel business.
Flexible loan terms – Bridging loans can often come with more flexible terms than the products from high street banks. The loan is tailored to your personal hotel’s requirements rather than a generic out-of-the-box product. With flexibility over loan amounts, loans-to-value, interest repayments and loan term, it can be well adapted for your needs.
Pays for key renovations – Hotels are constantly under pressure to maintain a strong image and with constant wear and tear due to guests, a bridging loan can be structured to cover important renovations to rooms, kitchen facilities, lounges, convention rooms and more.
Can fund a hotel purchase – Using the hotel as security, you can use a bridging loan for hotels as a way to buy a hotel or through a management buyout. This source of finance can be utilised for up to 24 months until other funding alternatives become available.
Types of Bridging Loans For Hotels
Light refurbishment bridging loans – This includes minor cosmetic changes to decor, furniture, painting walls, restoring carpets and updating bathrooms.
Heavy refurbishment bridging loans – This refers to structural renovations such as building new floors, conversions, basements, building swimming pools and redesigning the entire hotel.
Second charge bridging – This allows you to add additional funding on top of an existing loan, such as a bank loan. As a second charge, it becomes second in priority when it comes to be paid and the loan-to-value and amount you can borrow is based on risk and is lower than the first charge loan.
What are Bridging Loans for Hotels Used For?
- Acquiring a new hotel
- Refurbishing or expanding existing hotels
- Break a hotel chain
- Provide a cash injection to pay for staff and overheads before reverting to a different loan term loan
- Converting properties into hotels
- Airspace development
- Basements and conversions
- Management buy outs
Can I Get a Bridging Loan To Purchase a Hotel or Make Refurbishments?
Yes, you can certainly use a bridging loan to purchase a new hotel or existing hotel and make important refurbishments to increase its value and appeal.
Your hotel or property will be used as security and we can arrange a viable repayment strategy to accommodate your needs.
A bridging loan offers an immediate cash injection which can be used for buying or upgrading different features of the hotel, such as suites, rooms, restaurants, bathrooms, spa facilities and more.
This type of short term finance offers a valuable source of capital as you are looking to grow and expand and it can be used for 12 to 24 months until it is refinanced or alternative funding becomes available.
Useful Guides
What Is The Criteria To Apply For Bridging Hotel Finance?
- UK and abroad
- Viable business plan & exit strategy
- Proof of funds and financial statements required
- The hotel used as security
- Strong financial profile and hotel experience preferred
Case Studies
Development Finance For Hotels – Some Key Considerations
Some vital things to consider when using bridging loans or development finance for hotels include:
Planning permission – It is essential to have planning permission from the local authorities to carry out any desired building work. There is usually a process of several weeks or months for this to be approved and making sure that you have the right specification is key for any building work to take place and to avoid this having to be removed further down the line.
The cost of refurbishment and projected earnings– It is important to have a clear cost forecast and structure of any refurbishment work that you are looking to carry out. The ROI is key to ensure that you do not overspend on any refurbs and can command a strong room rate for accommodation based on the demand and competition in the local area.
Manage cash flow – If you are planning to take on debt, you will need a professional in finance and project management to manage your cash flow successfully and avoid needing to top-up or fall into further debt.
Experience – Lenders will look for customers that have experience in the hotel industry or development projects. A proven track record and clear understanding of tasks, costs and timeframes will be crucial to make the funding a success.
KP Finance is delighted to assist. We can look at your proposed plans and offer our advice in terms of the type of funding you require and the best way to approach it in terms of cash flow and timelines.
Frequently Asked Questions
How Soon Can I Get a Decision?
We aim to provide an initial quote within 24-48 hours of receiving your application.
How Much Will a Hotel Bridging Loan Cost Me?
Our rates for hotel finance start at 1-1.25%% per month, plus fees such as valuation, broker and legal fees that apply.
How Much Can I Borrow in Hotel Finance?
We can help facilitate £500,000 – £25 million in funding, depending on the security.
What Kind of Hotels Can You Provide Finance For?
- Bed and breakfasts
- Boutique hotels
- Business hotels
- Cabins
- Chain hotels
- Country estates
- Hostels
- Hotel resorts
- Lodges
- Motels
- Timeshares
Can You Provide Bridging Loans For Hotels in The UK and Overseas?
Yes, we can facilitate bridging loans for hotels across the UK, Wales, Scotland and anywhere abroad.
Is Bridging Finance For Hotels Right For Me?
Bridging finance is highly effective for short term funding gaps – and it could play a crucial role in providing immediate capital for any important hotel refurbishments, cash flow issues or operational costs that your hotel is facing.
For some, bridging offers an incredible opportunity to buy a hotel or expand an existing portfolio.
Understanding that bridging is used for short-term purposes is key – and having a firm control of your costs, cash flow and timelines is important to minimise costs and maximum value.
KP Finance will be able to review the best hotel finance options for you. We have long standing relationships with bridging lenders that specialise in hotels and can provide honest and valuable feedback on your plans and help you secure the right kind of funding for your needs.
