Popular Holiday Park For Purchase
The Situation
Holiday park finance for a young entrepreneur diversifying his business’ operations.
A young entrepreneur had a vision from his corporate coffee job. This was to fulfil his ambitions of establishing a new coffee shop brand. A brand that stood for communities, quality and sustainability. This ambition saw the entrepreneur win the concessions for cafes at some of the busiest municipal parks in the UK. Promptly growing the brand to 13 sites.
To capitalize on the success of his café business, our client wanted to venture into new markets to diversify his operations. He decided to enter the holiday park market. As it was a natural fit to his current business and would add a tangible asset to his balance sheet.
In pursuit of his first holiday park, our client sourced a holiday park for sale in a popular seaside location. The Park was a natural woodland escape by the sea. With charming log-clad lodges situated in twelve acres of woodland with panoramic coastal views.
Initial discussions with the vendor revealed that they were looking for a swift exit due to personal reasons. In addition to a previous offer on the holiday park falling through. As a result, the vendor was flexible around the purchase arrangement and price, allowing our client to begin negotiating favourable terms.
As discussions escalated, the entrepreneur needed holiday park finance and needed to find a funder to support him with the initial purchase costs for the holiday park. However, due to the sector, the Covid-19 restrictions, the limited financial information around the target business and the lack of experience the entrepreneur had in operating holiday parks, mainstream lenders were uninterested in supporting our client with holiday park finance to help him with this opportunity. However, the entrepreneur was confident that he had the ability to turnaround this holiday park and contacted a finance broker to help him source finance for the opportunity.
Where We Came In
We were contacted by the client’s broker to see if we could help. We quickly assured the broker that we lend based on the opportunity, and not the sector, and immediately started discussions with our client and his advisory board.
Our client presented a strong business case for the acquisition, backing his request with prudent forecasts that displayed how his planned refurbishment and unique hospitality offerings could add significant value to the park.
The transaction with the vendor changed multiple times, however, we supported our client by not only acting as a lender, but also as a team of expert advisors by directly assisting the entrepreneur in his negotiations with the vendor. Subsequently, a mutually acceptable deal was structured for all parties and after visiting the park ourselves, we offered the entrepreneur £550k to enter into the purchase agreement.
Mel Hird, Founder & Director at Fresh Thinking Capital, said: “When we founded Fresh Thinking Capital, our key ethos was to help businesses make the most of their opportunities. As we continue through this difficult time in the UK, we continue to deliver a service that allows our clients to focus on their opportunities and ensure we support them every step of the way.”
Term: 12 Months
Timing: 1 Month to complete
Security: 1st legal charge over holiday park | 2x Debentures | Corporate guarantee | Personal guarantee
The Result
The entrepreneur purchased the holiday park and despite the Covid restrictions, prevailed in his holiday park endeavour and exceeded all financial forecasts. Due to the success of the holiday park, trading being evidenced and the entrepreneur demonstrating his ability to effectively operate a holiday park, the client’s broker has been able to obtain a great offer from another long-term lender to refinance our funding.