The Cumberland triples lending to the hospitality sector

The Cumberland Building Society has revealed that it has tripled lending to the hospitality sector following a sharp rise in new loans.

Since the start of the financial year in April, it has approved 83 advances with value being up 205 per cent on the same period last year.

Funding has been provided for a variety of requirements including the support of purchases and refinance for new customers, as well as additional funding for existing customers.

Grant Seaton, Senior Commercial Manager at the Cumberland, believes the Society is reaping the benefits of its relationship manager structure, introduced in October last year, which has been a big hit with business customers.

He said: “We’ve gone the opposite way from most of the banks, which have centralised a variety of operations removing the relationship model that many customers look for.

“All of our customers have the telephone number of their relationship manager, and the number of an associate, so they can get straight through to somebody who knows and understands their business.”

As word of the Cumberland’s approach spread, more and more hospitality businesses have enquired about refinancing existing loans with the society.

Recent refinancing deals include a £2.9m loan for a five-star aparthotel in Lancashire, £1.15m for a boutique hotel in Bath and £800,000 for a luxury lodge park in the Trossachs, Scotland.

The Cumberland, which is based in Carlisle, has long been a specialist lender to the hospitality sector not only in Cumbria but, increasingly, across the country. Its customers operate hotels, guest houses and self-catering accommodation. Most are owner-managed businesses and small, often family-run, chains. It will lend up to £5m per property, up to 65 per cent of the trading value.

Grant said: “The size of our average loan advance has increased from £375,000 to £900,000 and that reflects the types of businesses coming to us. “We’ve strengthened our team with some very experienced people and that’s enabled us to consider larger deals.

“We recruited two business development managers this year, Martin Rankin and Derek Smith, from Allied Irish Bank after AIB sold a proportion of its SME loan book. Derek looks after customers in Scotland while Martin covers England and Wales.”

The hospitality sector is facing tough times as businesses grapple with a looming recession, soaring energy bills and higher interest rates. Grant said: “As a responsible lender, we scrutinise loan applications to ensure that the borrower can cope if they hit headwinds. “If a business does get into difficulty, we pass them to a customer care team that can support them to get back on track or exit in the right way.”

He added: “There has been a little bit of a dip in purchases, particularly with lifestyle businesses where, for example, somebody is giving up a salaried position to go and buy a guest house.

“Those hospitality businesses attempting to trade just below the VAT threshold are getting squeezed and sometimes the business case doesn’t stack up.

“There are still deals to be done though. We recently agreed a £750,000 loan

for the purchase of a guest house in the Lake District. “Our message to hospitality businesses – whether they’re looking to fund a purchase or refinance an existing loan – is to come and talk to us.”

For more on the Cumberland’s commercial mortgages for hospitality

businesses, check out the website: https://www.cumberland.co.uk/business

spot_imgspot_img

Latest

Police urge two potential witnesses to come forward

Police are asking for help to identify two men...

Drug drivers told ‘get help or get caught’ this Christmas

A new campaign urging drug drivers to 'get help...

West Indies v England 2nd ODI: Preview, team news and how to watch

The State of Play Having endured a torrid Cricket World...

A PT shares the 5 exercises you should be doing this Christmas

A fitness guru spills the beans on the TOP...
spot_img

Subscribe to our newsletter

Business Lancashire will use the information you provide on this form to be in touch with you and to provide updates and marketing.

Don't miss

Australia off-spinner Nathan Lyon to play county cricket for Lancashire in 2024

Australia off-spinner Nathan Lyon will join Lancashire for the...

Police urge two potential witnesses to come forward

Police are asking for help to identify two men...

Best Christmas Gift Ideas for Men

With Christmas just around the corner, what better time...

AMD Design Award 2023: Illuminating Sustainable Creativity and Innovation

The AMD Design Award 2023 contest, designed for CG...

More News

Green light for Northstone’s energy-efficient homes in Wigan

Homebuilder Northstone’s plans for a 113-home community in Atherton have been given the green light by Wigan Council. The development is an important early phase...

Next Day Delivery Across the UK: The Tilers Hub’s Launch by a Family Tile Specialist

Andrews Tiles, a well-established family-owned tile specialist with a 137-year legacy, has extended its services nationwide by launching an online platform, TheTilersHub.co.uk, which guarantees...

Sneak Peek: Peach Hamper’s Corporate Christmas Collection for 2023

Peach Hampers has introduced its latest Corporate Christmas hampers for 2023, featuring a carefully curated selection of products that are now available for online...