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  • FIRST POST
    • jonnytekno
    • By jonnytekno 29th Nov 17, 8:42 PM
    • 23Posts
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    jonnytekno
    Business loan to buy and run a B&B - no idea where to start
    • #1
    • 29th Nov 17, 8:42 PM
    Business loan to buy and run a B&B - no idea where to start 29th Nov 17 at 8:42 PM
    Hi there,

    I have had the initial kernal of an idea to try and buy and run a local B&B business which has come on the market.

    I work full time and have a good salary. My wife doesn't work so would run it all. It's already a successful business so it's really just a case of buying the property and taking it over, although we would probably want to do renovation to it as well in order to put up the rates.

    Here is the part that might get me laughed out of the forum - we have zero capital for the deposit on the mortgage. My question is whether there is any way of us getting a business loan or even any kind of capital from an investor in order to front the deposit and any cash to get started, or is that literally insane?

    I actually work in the hotel industry on the commercial side so I know a lot about how to make a business like that work, and my wife is an interior designer normally but a full time mum at the moment.

    Any ideas? I know nothing about trying to raise finance like this.
Page 1
    • zx81
    • By zx81 29th Nov 17, 8:46 PM
    • 14,401 Posts
    • 15,197 Thanks
    zx81
    • #2
    • 29th Nov 17, 8:46 PM
    • #2
    • 29th Nov 17, 8:46 PM
    Without making any contribution of your own money, you're going to need to find yourself a Dragon.
    • BoGoF
    • By BoGoF 29th Nov 17, 9:06 PM
    • 2,737 Posts
    • 1,971 Thanks
    BoGoF
    • #3
    • 29th Nov 17, 9:06 PM
    • #3
    • 29th Nov 17, 9:06 PM
    Ball park figure as to how much this will be?
    • meer53
    • By meer53 29th Nov 17, 9:15 PM
    • 8,999 Posts
    • 13,055 Thanks
    meer53
    • #4
    • 29th Nov 17, 9:15 PM
    • #4
    • 29th Nov 17, 9:15 PM
    How old are your children ? Full time Mum and running a B & B are two jobs. How does your wife feel about her role in the B & B ?
    • DCFC79
    • By DCFC79 29th Nov 17, 9:15 PM
    • 30,425 Posts
    • 19,235 Thanks
    DCFC79
    • #5
    • 29th Nov 17, 9:15 PM
    • #5
    • 29th Nov 17, 9:15 PM
    Just a couple of points, you kention about raising the rates, I take it you have looked into if you could even get the new rates.

    Im not sure its easy as taking it over, you say you work in the hotel industry on the commercial side, any actual experience of running a hotel, dealing with staff.
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • boo_star
    • By boo_star 29th Nov 17, 9:50 PM
    • 1,329 Posts
    • 677 Thanks
    boo_star
    • #6
    • 29th Nov 17, 9:50 PM
    • #6
    • 29th Nov 17, 9:50 PM
    Without making any contribution of your own money, you're going to need to find yourself a Dragon.
    Originally posted by zx81
    I think the dragons would run a mile when they find out the OP doesn’t have any skin in the game
    • venison
    • By venison 29th Nov 17, 10:10 PM
    • 1,359 Posts
    • 1,448 Thanks
    venison
    • #7
    • 29th Nov 17, 10:10 PM
    • #7
    • 29th Nov 17, 10:10 PM
    OP your only option would be a business loan from a bank and you would need a) a business plan b) at least 50% of the required capital.
    Without both of these then I'm afraid you will have to forget it.
    I am a BG on loans,credit cards and benefits I volunteer to help get your forum questions answered and keep the forum running smoothly". Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.
    • Richey_
    • By Richey_ 30th Nov 17, 12:18 AM
    • 288 Posts
    • 326 Thanks
    Richey_
    • #8
    • 30th Nov 17, 12:18 AM
    • #8
    • 30th Nov 17, 12:18 AM
    Harsh answers in my opinion

    OP how much equity do you have in your own home? Realistically you would need to put the on the line for a bank to invest in your business to be viable. How much homework have you done re other costs involved in this as a business?
    • BrassicWoman
    • By BrassicWoman 30th Nov 17, 7:15 AM
    • 1,379 Posts
    • 5,845 Thanks
    BrassicWoman
    • #9
    • 30th Nov 17, 7:15 AM
    • #9
    • 30th Nov 17, 7:15 AM
    or sell your house and live in the B&B
    Downsized and mortgage free
    Dec 17 grocery challenge £89.65/ £120
    • Brock_and_Roll
    • By Brock_and_Roll 30th Nov 17, 8:54 AM
    • 774 Posts
    • 745 Thanks
    Brock_and_Roll
    FWW I am a (live in) B&B owner. Just to clear things up, there is absolutely zero chance of getting a commercial mortgage to purchase a B&B without at least a 20% deposit.


    We purchased our property as a going concern, moved in and had guests there very next day as well as a live in lodger who went to work under one owner and came home to someone new! Luckily he was and is a most excellent chap! So it is a big dive into the unknown and very stressful - my wife (who also had small children) was often in tears. But we got through it and the business was successful - albeit one of the hardest ways imaginable to make a small amount of money! People have no idea how much hard work it is to strip and clean rooms each day, do all the washing, ironing, cooking etc never mind all the fruitless waiting in for guests to arrive or leave. Luckily to clear minimum wage if you factor all this in!!!


    We were also on a standard residential mortgage (but got proper commercial insurance).
    • venison
    • By venison 30th Nov 17, 8:32 PM
    • 1,359 Posts
    • 1,448 Thanks
    venison
    Harsh answers in my opinion

    OP how much equity do you have in your own home? Realistically you would need to put the on the line for a bank to invest in your business to be viable. How much homework have you done re other costs involved in this as a business?
    Originally posted by Richey_
    Personally I don't think the answers are harsh, would you really advise someone to put their family home on the line to invest in a business in which they have no experience.?
    Home work regarding cost etc would all be part of a business plan.
    I am a BG on loans,credit cards and benefits I volunteer to help get your forum questions answered and keep the forum running smoothly". Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.
    • Tarambor
    • By Tarambor 1st Dec 17, 12:05 PM
    • 1,761 Posts
    • 1,208 Thanks
    Tarambor
    It's already a successful business so it's really just a case of buying the property and taking it over, although we would probably want to do renovation to it as well in order to put up the rates.
    Originally posted by jonnytekno
    The one question I always ask is that if it is so successful then why is it up for sale?
    • iolanthe07
    • By iolanthe07 1st Dec 17, 3:18 PM
    • 4,927 Posts
    • 4,642 Thanks
    iolanthe07
    The one question I always ask is that if it is so successful then why is it up for sale?
    Originally posted by Tarambor
    Retirement? Want to try something different? Bored with having to get up every day at double O crack to cook breakfast? Lots of genuine reasons for selling a business.
    I used to think that good grammar is important, but now I know that good wine is importanter.
    • Tarambor
    • By Tarambor 2nd Dec 17, 4:47 PM
    • 1,761 Posts
    • 1,208 Thanks
    Tarambor
    Retirement? Want to try something different? Bored with having to get up every day at double O crack to cook breakfast? Lots of genuine reasons for selling a business.
    Originally posted by iolanthe07
    If it is as successful as claimed they can employ staff to cover those issues and continue with a successful business which can make money to be used to support a new venture. A friend of mine has 5 completely unrelated businesses on the go at the moment, he doesn't just shut down one generating profit because he wants to do something else. When my wife's boss decided he wanted to retire he just left her to run the business, occasionally popping in when he was bored.
    • Sarastro
    • By Sarastro 15th Dec 17, 10:41 PM
    • 360 Posts
    • 278 Thanks
    Sarastro
    I appreciate that I don't know you, but this sounds like a huge risk to me. The margins in this industry are tight and you would be taking on a lot of debt (assuming you can find it in the first place). I think the potential for a near divorce experience is quite high. I suggest long hard think.
    Debt 1/1/17 - Credit Cards £17,280.23; overdrafts £3,777.24
    Debt 12/12/17 - Credit Cards £3,580.65; overdrafts £0
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