What is Hotel Asset Finance?
Hotel asset finance is simply a financial tool used by hoteliers to fund their hotels, which enables them to access the assets they need for their business. It is a very broad tool that can be used to fund a huge variety of equipment essential to the running of a hotel. Hotels need to cater for a vast number of guest needs, there are the obvious basic requirements, such as a bed for every guest-room down to the teaspoons used to stir their tea at breakfast.
The cost of all the required equipment can seem never ending for a hotelier, and the price of a never-ending list can be astronomical once everything is factored in. Regardless if it is a hotelier setting up for the first time or looking to renovate their existing hotel, this bill will quickly eat into budget or cashflow, so in order to obtain the required assets, hoteliers are able to use hotel asset finance. Hotel asset finance enables hoteliers to spread the cost of the equipment over a number of years, generally over two to five, paying monthly until the asset has been paid off.
What can be financed using Hotel Asset Finance?
Simply, if it is in a hotel then it can be financed. As mentioned above the amount of required equipment hotels need just for their basic operation is mind boggling. For each room as standard a guest will find, a bed, two side tables, lighting and lamps, a desk and chair, a television, a bathroom suite, wardrobes and a chest of drawers. All of this can be financed, even the cost of fitting out the bedroom can be financed.
Of course, the bedrooms are only part of the overall guest experience, perhaps you want your hotel to offer its guest a relaxing pool with a sauna and steam room. It is essential that every hotel has a kitchen, and a subsequent dining area and then there is the reception and the lounge. Everything that you can imagine in the hotel is able to be financed and the upfront cost spread over two years or more.
Maybe your hotel will also have a gym for guests, offer air conditioning throughout for guest comfort, both of these can be financed. Then there is the back of house and back office, so laundry equipment finance to office equipment finance.
How does Hotel Asset Finance work?
At GSM we work with 35 lenders, all of which have a different risk profile and some are more comfortable lending on certain assets then others. With this knowledge we are able to take certain assets for your hotel to certain lenders and other assets to others, to ensure you get the right tailored package. It will all start with a quote, invoice or purchase order from your supplier. Once this has been received, forward it to your dedicated finance broker, who will handle the application from there on. You broker will set you up a profile, for which he will need your latest annual year end accounts and the previous three months management accounts. If personal guarantees, commonly abbreviated “PGs” are available from a director of the business then your broker will also need them to complete a Statement of Assets and Liabilities. When PGs are available, this generally gives access to better rates from our lenders as this gives them an added level of security so that in the worst case the director will guarantee the return the financed asset.