LM Hospitality Limited

Funds Raised

£4,235.00

Final AER

16.53%

Loan term

12 MONTHS

Auction Closed

N/A

Trading on Hold
Microloan trading is currently on hold for this loan.

About the Business

Company Name: LM Hospitality Limited Company Number: 09800158
Business Type: Years Trading:
Business Location: RADSTOCK

About the Risk

Risk rating

C

Default rate

13.30%

Bad debt rate

5.47%

About the Security

Security Offered:

Risk Indicators Identified:

Important Files

Who are we?

Laura Woodall and Morgan Gray, the owners and directors of the newly formed LM Hospitality Limited are looking to purchase the lease of The Thatched Cottage Inn on the outskirts of the Somerset town of Shepton Mallet, this being an 8 bedroomed hotel with restaurant and pub.

They seek a £45K 5 year loan towards the £120K purchase price and have a further £20K for initial working capital and costs i.e. they are personally introducing £50K from savings and a further £50K has come from family members. The whole £100K has been introduced in the way of fully paid up share capital.

The pub itself has successfully traded for a number of years and is being sold as a consequence of the impending retirement of the current owner. The unit turned over £633,284 in 2014, split 41% food, 31% wet and 28% accommodation sales, delivered a solid GPM of 69% with an average EBITDA in the last three years of £65291.

Ten years remain on the Greene King lease and the company wants to take occupation ideally pre Christmas, but certainly by 1st January 2016.

Laura has many years’ experience in the trade, latterly in a management role and will be very much at the front of the business. Morgan will run the financials as well as taking responsibility for marketing and general strategic development. A detailed business plan has been produced and is attached for consideration by members. There is no massive uplift in sale forecast, just sensible and conservative growth, projecting flat numbers in 2016 and an average of just 4% across the following 2 years. Margin improvements can be delivered with an increase to 71%.

Read more

Loan Offers

What is the loan for?

The purchase price of the lease itself is £120K plus SAV, estimated at £3K.

With start up costs and initial working capital calculated at a further £22K and Laura and Morgan having introduced £100K in total a loan of £45K is sought to enable the transaction to proceed.

Why consider investing?

Laura and Morgan are two hard working, focused individuals keen to make a business of their own happen.

They have a skill blend which leaves them well placed to take advantage of this opportunity and have been disappointed by the unwillingness of the clearing banks to support their proposal in spite of the stake being put forward.

They are buying a successful business in a great location, not a failed business with boards on the windows and the banks’ unwillingness to support the hospitality sector in general has saddened them.

There is no tangible security beyond PGs but a debenture is offered to pick up any value that might sit in the leasehold interest reflecting the fact of course that the lease only commands a value in a successful business and will be worthless should lenders be faced with a business failure. Fixed assets in the way of fixtures and fittings will also be picked up under any debenture, valued in the 2014 balance sheet at £83K giving extra comfort.

Disclosures

The accounts displayed in the Financials tab are those for Cottages Hotels Ltd, the existing business that is being purchased by LM Hospitality Limited

Security

The loan is to be secured by personal guarantee's from the directors and will be supported by Personal Guarantee insurance as well as an all assets debenture

The directors do not have any tangible assets

DateAmountCapitalInterestReceived
27/04/2019£385.32£326.97£58.35
27/05/2019£385.32£331.48£53.84 (9 days late)
27/06/2019£385.32£336.04£49.28
27/07/2019£385.32£340.67£44.65
27/08/2019£385.32£345.37£39.95Not Due
27/09/2019£385.32£350.13£35.19Not Due
27/10/2019£385.32£354.95£30.37Not Due
27/11/2019£385.32£359.84£25.48Not Due
27/12/2019£385.32£364.80£20.52Not Due
27/01/2020£385.32£369.82£15.50Not Due
27/02/2020£385.32£374.92£10.40Not Due
27/03/2020£385.32£380.08£5.24Not Due
Total:£4,235.06£388.78