B&B Commercial Leashold - Finances Help

drfclee

Hi,

My soon to be wife and I are interested in taking on a B&B leasehold business in Lake District as a complete life and career change.

The major stumbling block for getting started are finances. The leaseholds we have seen range from £160k-200K but having read many websites including several banks own info pages, I'm pretty sure getting a big enough loan/mortgage to cover the majority of the outlay isn't possible. At a push we could have approx. 25-30K from both saving vigorously and selling our current home.

The thought of taking on this project excites us both but as a realist I know finances play the major part for this to move forward.

I fully understand getting a loan requires a business plan with good figures in order to show any loan can be re-paid but
my question is whether there is potential to get up to 90% of the finances required prior to us actually looking at available businesses.

Annisele

You might get better responses over on the mortgages board.

I'm not a specialist in commercial lending, but I'm afraid I'd be *very* surprised if you could get finance at 90% for a project like that. "Complete life and career change" makes it sound as though you don't have any experience running a B&B, so it would be very difficult for you to prove to a bank that you were able to do it. Proving income would be very difficult - as presumably you'd be giving up your old jobs, and there'd be no guarantee you'd do as well running the business as the previous owners.

You'd also need a chunk of cash to pay your living and business expenses while you got the business started. I'd expect to pay more in fees for setting up a B&B than I would for buying a house (eg if I was buying a business rather than just a house I'd want a solicitor to check exactly what I was buying - and I'd expect that to cost more than conveyancing on a house).

That all adds up to a high risk proposition for a bank.

Is it possible to make the lifestyle change without taking the financial leap? Eg by getting jobs managing somebody else's B&B for a while?