Guest house finance

Just like hotels and B&Bs, UK guest houses are booming as the world recovers from the pandemic. Smaller than most hotels, but larger than your average B&B, guest houses fill an important niche in the hospitality industry.

Read this article to me

With more than 29million overseas visitors expected in 2023, plus domestic trade that is almost back to pre-pandemic figures, now is a good time to be a guest house owner. However, to buy, start, and run a successful guest house, owners and entrepreneurs will typically need additional funding. Read on to find out more and to discover what you need to secure the best finance for your guest house business.

Business loans and mortgages for buying a guest house

Guest house finance comes in many shapes and sizes. This funding can be used to refinance a current guest house loan, renovate your building, acquire or build a new guest house, or cover seasonal quiet spots that create a cashflow squeeze. Guest house finance is tailored to fit the unique financial circumstances of the hospitality industry, and in many cases, the property or acquired assets work as security and there is no need to provide additional collateral. This means guest house owners and companies that have weak credit or have been previously turned down for funding may still be able to obtain the financing their business needs to grow.

Which type of finance is best for my guest house?

Match the right business loan to your guest house needs:

Commercial mortgage

Long-term guest house finance that you use to buy an existing guest house or to build a new one. Borrow up to 90% of the purchase price, with the property providing security for the loan. Repay the loan over 1 – 25 years.

Development loan

May be used to pay for new construction or re-development of existing guest houses. Pay for extensions, major repairs, car parking space, retrofitting, refurbishment, etc. The property acts as security for the loan.

Asset finance

These are larger loans used to buy vehicles or big-ticket guest house items such as commercial kitchens, or HVAC upgrades. Make money from the asset as you pay for it – over a period of 1 to 5 years. The asset acts as security for the loan.

Franchise funding

Loans to start a new guest house franchise business or to expand an existing one. May require added security.

Cashflow loans

Cover seasonal slow points with fast and affordable cashflow loans:

  • Merchant Cash Advance: Short-term borrowing to cover everyday expenses, such as wages, small repairs, and utility bills. Nearly all guest houses take credit and debit card payments from customers. Lenders provide funding as a percentage of your daily, weekly or monthly card turnover. You repay the loan as card receipts are released from the bank. As your card sales rise, you can borrow more. Usually, no added security is required.
  • Invoice Finance: Do you take corporate guests who pay on account? Don’t wait for them to settle their bill. Unlock the value of your unpaid B2B invoices immediately. Funds are lent against the value of the guest house accounts receivable, and you repay as your corporate clients pay you. Unlike factoring, you retain control of your sales ledger and clients do need not know you are borrowing against your invoices. Usually, no added security is required.
  • VAT loans: Funds to help guest houses pay their VAT bill and to avoid penalties from HMRC. May require added security.
  • Revolving Credit Facility: Much like a bank overdraft. The borrower can dip into an open credit facility as and when funds are needed. The borrowing is repaid from incoming receipts. May require added security.

How to find the right funding for your guest house

Guest house financing is a niche area, with differing rules of application. Guest house owners seeking this type of funding may find themselves forever searching and making applications to lender after lender. The delays this can create could cause you to lose business and leave your guest house vulnerable to the competition. Instead, working with a broker, who can access guest house loans and mortgages from a wide range of lenders is a better way to go. No more cold calls and endless demands for information. Simply tell us what you need and leave the rest to us. 

Get started with Swoop

Check in with Swoop to find the best rates, the best terms and the best guest house loans and mortgages all under one roof.


Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

Swoop promise

At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.

Find out more about Swoop’s editorial principles by reading our editorial policy.

Clever finance tips and the latest news

delivered to your inbox, every week

Join the 70,000+ businesses just like yours getting the Swoop newsletter.

Free. No spam. Opt out whenever you like.

We work with world class partners to help us support businesses with finance

Looks like you're in . Go to our site to find relevant products for your country. Go to Swoop No, stay on this page