Securing £1.35m Loan For Family Farm Holiday Business
Family-owned property ventures are often labours of love, with each generation adding value through investment and effort. For one such family, new UK tourism habits posed an enticing opportunity, provided they could fund their ambitious plans.
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The UK’s tourism industry has been experiencing a boom since the COVID-19 lockdowns forced people to change their holiday habits. Holiday let properties are popular across the country, with some favouring city-centre breaks but many choosing rustic escapes.
In a recent client project, we were approached by a client that already operated a family-owned holiday business in a converted farmhouse. The existing unit boasted four holiday cottages as well as the family’s living area, but they had decided to increase their profitability by expanding to six more units and a wedding venue.
Crucially, the family had already secured planning permission and was ready to commence with the development. All they needed was to finance the project, which is what lead them to seek our help.
Why was there a problem?
The client’s farmhouse holiday property was popular with tourists, attracting regular bookings. They recognised the opportunity to harness that popularity and welcome more guests by expanding their property to increase the amount of guests that could stay.
When planning the unit expansion, the family also identified the potential for a wedding venue in a disused barn, which would require a total conversion but could allow them to host large events and gatherings. The project would include development for the required facilities such as parking, toilets, kitchen area etc.
Facing extensive costs, the family couldn’t fund the project using their own capital and needed to seek finance. They recognised that an expert team on their side could help optimise their rates and terms, electing to approach Rangewell to see how we could support them.
Why we were able to help
Rangewell can identify the optimal finance arrangement for you depending on your business and its circumstances. In some cases, a general business loan may be ideal, but in others, more specialised forms of finance would be better suited. In this case, the client sought a development loan.
We worked with the family to refine their business plan and negotiate with the right lenders. We narrowed down the choices to a lender who offered a loan of £1.35m with an interest rate of 7.75%. This was granted against the value of their current property, worth around £2.3m.
As they continued to welcome guests, the client needed to plan the project to minimise disruption, so they needed flexibility over timescales. The finance we negotiated for them included withdrawing charges, so they’d only pay for the money they withdrew from the ‘pot’ of £1.35m, giving them more control over their plans.
Maximising profitability with finance
Development finance is often reserved for hotels and other more tangible investments where a lender can recognise the finished bricks-and-mortar value. For holiday lets and glamping, where that value can be more subjective based on guest demand, lending can be more reserved.
With Rangewell on your side, you can secure a loan that helps you develop more units and infrastructure on your site to welcome more guests. This, in turn, increases your overall profits and makes repaying any loan simple. We’ll help you build your business plan and determine what/if finance is right for you, all with no obligation or cost.
Expand your holiday property with Rangewell today.