Finance for Asian Wedding venues

The Asian wedding market presents exciting business opportunities.

Many Asian weddings are lavish, with a thousand or more guests not unusual. Traditional wedding venues in the UK are simply not large enough - and, as a result, specialised venues are being set up across the country.

There are profits to be made not just from providing the venues themselves, but for decorating the hall, for catering, for the bar where appropriate - and from services like cars, musicians, flowers and photography.

What's more, unlike traditional British weddings where there is a focus on Saturdays in summer, Asian weddings take place all year round. In some cases, it may even be possible to cater for morning and evening events on the same day.

Even when times such as Ramadan may mean that wedding bookings are down, venues can still be busy providing late-night dining when fast is over.

The sector is exciting and growing fast - but there are several major financial hurdles.

The cost of premises

The size of Asian weddings makes most traditional hospitality venues inadequate for the numbers involved.

The most common solution is to buy large, redundant industrial or retail buildings which offer a large, uninterrupted internal space - although you should remember that if you intend to redevelop a building or alter its intended use, you may require planning permission from the local authority.

Buying a suitable structure in an acceptable location can usually be funded with a Commercial Mortgage. These operate much like residential mortgages, with a large loan secured on the value of the property itself. Generally, Commercial Mortgages are for 15 years or more and, as with a residential mortgage, the premises themselves will be at risk if you are unable to keep up your repayments.

However, there are some important differences to remember.

Unlike a residential mortgage, Commercial Mortgages are arranged on an individual basis, and there are no standard advertised rates. Lenders will base their decision on risk and look at your business, your accounts and projections to set interest rates that reflect the level of risk your plans present.

Typical loan-to-value ratios for a new business with no trading history will be a maximum of 50% of the purchase price. Owner-occupied businesses such as offices or shops can normally get a maximum loan-to-value of around 80%. There will also be valuation, arrangement and legal fees to consider.

This can mean that the cost of the Commercial Mortgage you need will vary greatly between different suppliers. That is why it is important to get expert support to ensure that the funding you are offered really is the most cost-effective for your plans.

At Rangewell we work with all the leading Commercial Mortgage suppliers and can help you secure the funding you need. You can find out more by visiting our page commercial property finance or commercial mortgage page.

Refurbishment

An industrial or retail building will require refurbishment to be an appealing wedding venue. Flooring, walls and ceilings will all require replacement, along with lighting. You will probably need to provide a prestige foyer and reception area which can be used for photography, and you will need to overhaul frontage to offer a suitable appearance.

The costs involved will depend on the size of the venue and the materials required. A basic interior refit based around drapes may be achievable with a budget under £100,000 - but a spectacular refit using marble and other costly materials may be necessary to create a high-end venue capable of commanding the highest rates and ensuring constant demand.

This could cost many times that figure.

Funding this type of work might require a secured loan, with the security provided by the property itself.

Equipment

Your wedding venue will have a long list of equipment needs. Tables and seating will be required - so will lighting, a sound system and a kitchen. Many wedding planners will bring in their own caterer who will provide utensils, but you will need to have grills, hobs and ovens, plus refrigeration ready for them to use.

You will need cleaning equipment and business items such as computers and printers.

Asset Finance lets you spread the cost of all the equipment - or assets - you need. There are several types of Asset Finance:

Hire Purchase

Hire Purchase allows you to hire assets until you have paid for them, when they become yours. It can spread the cost of items such as seating and tables that you will expect to give you long service. HP agreements generally last between 12 and 72 months and require a 10-20% deposit plus fixed monthly instalments.

Leasing

Leasing operates like a rental agreement, and you will pay a monthly charge for your assets. You might choose to lease your IT equipment, which can provide the extra peace of mind that comes from knowing that if something goes wrong, the lease company can be responsible for dealing with it. Sound systems are often leased, allowing them to be easily replaced when better alternatives become available.

Find out more about Asset Funding.

Working Finance

Setting up a new business will inevitably mean cash flow is slow at first.  Bookings will take time to come in and there will be a long wait between receiving a deposit and your final payment after the event. Until your venue is fully established, you may need a supply of funding to deal with the costs, from utility and local council business rates to publicity.

Working Capital Finance can provide the solution - with a short-term loan designed to cover the everyday costs, and paid back once your business has reached full profitability.

Updating

Maintaining a high-quality venue will mean constant updating and replacement of fixtures and fittings - and at times you may need to replace key items quickly.

We can provide Short-term Funding which will allow you to ensure that you can always maintain your standards.

Insurance for your Asian wedding venue

Your Asian wedding business will need a range of insurance protection.

Cover for your staff is a legal requirement. You must have employers’ liability insurance of at least £5m to protect you against the cost of a claim if an employer is injured or becomes ill as a result of working for in your business.

You will also need cover in case patrons are injured, and insurance for your premises and equipment.

You should consider speaking to a specialist insurer who may understand the risks better than a general one, and is likely to offer more suitable policies. We can provide a number of ways to provide for these costs.  

Tax Loans for club businesses

Your business will be liable for VAT, and a large quarterly VAT bill will be a drain on your cash flow - as will a large liability for corporation tax.

A Tax Loan could let you deal with tax demands with affordable monthly payments. It would mean better control of cash flow, predictable monthly payments and avoid problems and penalties from HMRC.

Find out how a Tax Loan could support your cash flow.

Helping if your business runs into financial problems

Your Asian wedding business can be very lucrative, but if bookings don’t come in, neither will the cash.

At Rangewell, we know the solutions which can help deal with this kind of challenge. We can provide funding solution if your business has run into temporary financial issues - and even if you have a damaged credit history or CCjs, we know the lenders which can provide support.

Getting the help you need to set up a wedding venue

With several different types of funding required, it can be difficult to secure the deals you need.

At Rangewell, we know the funders who can offer the most competitive rates, whatever the funding challenge - and those who will be happy to consider business plans outside the traditional areas.

We understand the challenges you face setting up a large wedding venue and can work with you to tailor the kind of complicated ‘Jigsaw’ funding plan you will need to support your plans.

We understand the challenges of scaling up. Call us now to get our experts working for you