Business mortagage costs - holiday complex

[Biggles111]

I am looking at a future point to drop down a gear and buy a holiday complex (typically a farmhouse, 6 letting units, and leisure facilities). I am keen to build up enough equity to get something big enough - however things are going well and hope that in 12 months I will be in a position to proceed.

In terms of some rough figures - I have seen some interesting complexes with a reasonable yield up for asking prices of around £1.1Mn. If I put in say £400K as equity and borrowed £700K does anyone have a feel for what sort of rate we would be likely to secure? Is a fixed rate possible? I am asking as at this time I am just trying to scope out some numbers and don't want to waste a broker's time prematurely.

Thanks for your help.

[anonymous-user]

Hi

Putting finance costs to the side, what would be the expected annual profit?
Are you looking for interest only or capital and repayment?
How long would you want to borrow the money over? Both will gave a bearing on the rate available. Both fixed and variable are available.

[Biggles111]

Current trading figures (subject to verification) suggest a gross turnover after VAT of around £90K. Overheads (rough estimate at this time based on business rates/council tax, utilities, advertising, insurances, Saturday cleaner, but excluding any ongoing refurbishment costs or any salary to ourselves) are likely to be around £20K.

To free up early cashflow we would be looking at interest only, but ideally with a facility to make payments a few years in once we have grown some capital as a cushion. This could alternatively be done at a later time if for example refinancing.

Term would ideally be 25 years. A fix for long as possible would be attractive to allow predictability over cashflow in the early years.