Commercial mortgages for holiday parks and leisure businesses.
The UK holiday and leisure market is evolving, with more people than ever before rediscovering the fun and flexibility of holidaying in the uk.
For a holiday park site owner, this presents an opportunity to attract more visitors and generate more income. However, it’s important to have the right funding in place to take advantage of this opportunity.
We have a range of holiday park finance solutions that can help you expand your business and make the most of the increased demand for UK holidays.
What is holiday park finance?
Holiday park finance or a holiday let business mortgage is a type of commercial mortgage that is used to purchase or refinance a holiday park site. Typically this would be a freehold piece of land covering several acres.
These sites could be marketed under different names according to their design and target market.
But they would be most commonly known as:
- holiday park
- holiday lodge park
- static caravan site
- log cabin holiday park
Often the site will have a mix of units, combining luxury lodges with glamping pods and log cabins.
As a commercial mortgage broker we can only assist with finance for the entire site and cannot help individuals to buy a specific lodge or chalet.
What can holiday park finance be used for?
The most obvious reason someone would need commercial finance would probably be to acquire the site in the first place.
Let’s take a look at what’s possible:
To buy land
If you need to purchase a freehold site to start off your business then a holiday park commercial mortgage can help to fund the land purchase.
To buy a business
Maybe your intention is to acquire an existing trading holiday park business and site. Commercial funding can help with this where there is freehold land.
To improve a business
Capital raising is available to improve an existing site. Perhaps to install a new swimming pool, restaurant area, install new letting units or upgrade services and amenities.
To expand a business
If you want to expand an existing business then a commercial mortgage can help you to buy adjoining land so you can install more holiday lodges.
Looking for an individual holiday let mortgage?
Having specialised in these mortgages since 2006 there’s not much we don’t know or haven’t seen. All properties must be freehold or leasehold with registered titles.
What is a holiday let business?
The providers of commercial mortgages will need to be happy with the style and basic structure of your holiday park business. These will obviously come in all shapes and sizes.
Typically these are the types of opportunities that a commercial holiday park lender would be interested in:
- holiday parks consisting of chalets or wooden lodges
- holiday complexes with multiple titles
- a site which has multiple short-term letting units, forming a small holiday park or complex
- 4 or 5 barn conversions forming a small complex
- 5+ short term letting units, along with owners’ accommodation
These sites and parks will usually have C3 restricted planning, only for short term lets and holiday letting.
What holiday park finance is available?
Funding for the purchase of a leisure or holiday park, with or without trading history, can be obtained from a commercial mortgage lender.
Once you move over to commercial mortgages you will find that every deal is assessed manually, by real people who understand the leisure industry.
The lender will ask for a CV from the applicant/s together with a business plan. If there is no, or little, experience in tourism and leisure, it’s not an issue, as long as they have transferable skills suited to running a holiday park site.
We can also assist the site owner with the purchase of the actual homes/lodges using asset finance.
Who can borrow?
- Individuals
- Partnerships
- Limited companies
- SPV companies
Personal guarantees are likely to be requested.
Repayment terms
Loans are typically approved on a repayment basis with terms of up to 25 years.
For start-ups there may be the opportunity to have the first 12-24 months as interest only to assist with cashflow.
Why use a broker?
Arranging commercial finance for holiday parks remains a specialist area of lending which is almost exclusively handled by experienced brokers.
Applying for a commercial loan is a very different experience to applying for a mortgage to purchase your own home.
By working with an experienced broker, like ourselves, you will have an extended team of professionals who can assist and guide your application towards a successful approval. We were one of the few brokers who started specialising in holiday let mortgages when the market was in its infancy in 2006.
We operate as an independent broker in Bexleyheath and therefore have unrestricted access to lenders, banks, finance houses and specialist lenders. Many of these smaller operators are very keen on the hospitality and leisure sectors.