Refinance & Renovate: A Smarter Strategy for Boutique Hotel Owners
- sjohnston90
- Jul 23
- 2 min read
The Market Is Evolving — But Hospitality Still Gets Overlooked
The Bank of England’s recent policy updates are easing affordability rules and encouraging higher loan-to-income lending, making conditions more attractive for business borrowers.
But hospitality owners like Nina are still facing real friction.
While her 12-room hotel has consistent occupancy, growing turnover (£1.1m), and plans to upgrade the kitchen, she’s hit the same wall many in the sector face:
❌ Traditional lenders view hospitality as “risky,” even post-pandemic
❌ Brokers don’t always understand seasonal cash flow or refurbishment ROI
❌ Nina doesn’t know what’s available outside the standard bank approach
2. Meet Nina: The Boutique Hotel Owner with Ambition
Age 51, East Sussex
Co-director with her long-term partner
Seeking: a commercial mortgage refinance + CAPEX for a kitchen upgrade
Her priorities: speed, transparency, and working with someone who gets her sector
She’s not looking for “lowest rate on paper.”
She wants a solution that makes financial sense long-term.
3. The Common Obstacles in Hotel Finance
1. Traditional Risk Models Don’t Match Reality
Hospitality still sits in high-risk categories, regardless of performance. This means many banks apply extra buffers or avoid lending outright.
2. Lenders Fixate on Past, Not Future
Most mainstream underwriters use last year’s P&L and ignore forward bookings or occupancy projections making it hard to fund growth-oriented upgrades like new kitchens, room refits or wellness suites.
3. Brokers Miss the Nuance
Many brokers present off-the-shelf options or push unsuitable bridging loans. That’s not strategy that’s admin.
4. Nina’s Better Strategy — What Worked
Here’s how I helped Nina move forward confidently:
✅ Step 1: Refinance with a Hospitality-Aligned Structure
We reviewed the current mortgage terms, assessed available equity, and structured a more flexible facility — lowering monthly costs and unlocking capital.
✅ Step 2: Build a CAPEX Plan with ROI Projections
Instead of just “asking for more,” we laid out the kitchen upgrade’s cost, its projected return (room revenue lift, event bookings), and cash flow impact. That positioned her as a strategic borrower, not a risk.
✅ Step 3: Add Short-Term Working Capital to the Mix
We incorporated short-term business finance for the renovation, with repayment aligned to high season revenue. No pressure, no disruption to day-to-day trade.
Nina’s Outcome
Monthly mortgage costs reduced by 12%
Kitchen refit fully funded
Now planning a second phase of upgrades, including a new breakfast area
Feels in control, not dictated by “tick-box lending”
Thinking About Refinancing or Upgrading?
Whether you’re looking to release equity, secure renovation funding, or simply reduce repayment stress, here’s what to expect when we work together:
✔️ We’ll map your business cash flow and goals
✔️ I’ll assess both mortgage and commercial funding options
✔️ You get a clear, jargon-free roadmap tailored to your seasonality and structure
Ready to Explore Smarter Finance?
If your current lender is stalling or you’re not sure what’s possible, book a free 15-minute strategy call with me.
No jargon. No sales pitch. Just a real conversation about what’s next for your business.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Commercial lending is subject to status. Stuart Johnston is an Appointed Representative of Kingston Finance Ltd, which is authorised and regulated by the Financial Conduct Authority.
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