Quick answer / TL;DR

Yes — hotels and hospitality businesses can refinance and combine different finance products to even out seasonal cash flow. Common solutions include reworking a commercial mortgage, adding a seasonal overdraft or revolving facility, invoice finance for corporate bookings, and asset refinance (sale & leaseback). We introduce businesses to lenders and brokers who can discuss suitable options for your circumstances. Free Eligibility Check — no obligation.

Why seasonal cash flow matters for hotels & hospitality

Hospitality is inherently seasonal: coastal hotels, country inns and conference venues can see strong summer or event months and much quieter mid‑winter periods. Fixed costs — payroll, utilities, business rates, maintenance and loan repayments — don’t fall when occupancy does. That gap creates reliance on short‑term borrowing or dipping into reserves.

When seasonal peaks fund off‑peak liabilities each year, it can be manageable. But if occupancy drops sharply or a capital project is needed in a slow month, you need a plan that reduces pressure on working capital and prevents high‑cost ad hoc borrowing.

Illustrative example: a 20‑room coastal hotel with average peak revenue of £120k/month and off‑peak revenue of £50k/month needs a facility to cover the average shortfall in winter months to meet payroll and supplier obligations.

What is refinancing and how it helps

Refinancing in hospitality means replacing or restructuring existing debt and adding facilities so cash flow matches trading cycles. It can reduce monthly repayments, consolidate expensive short‑term debt, unlock equity or add flexible seasonal facilities.

How refinancing smooths cash flow

• Extend loan term or move to interest‑only periods to lower monthly payments during slow months.
• Consolidate multiple high‑cost borrowings into a single, cheaper facility.
• Raise working capital via asset refinance or invoice finance to cover off‑peak months.
• Introduce a revolving seasonal facility you draw on in winter and repay in summer.

Typical refinance products

• Commercial mortgage refinance (long‑term).
• Term loan consolidation.
• Asset refinance and sale & leaseback (property, plant or equipment).
• Invoice finance (if you issue invoices to corporate clients).
• Revolving credit facilities / seasonal overdrafts.
• Short‑term bridging loans for timing gaps.
• Merchant cash advances (fast but higher cost).

For an overview of refinance choices in more depth, see our refinance loans page on refinance loans.

Which refinance options suit hospitality and when

Revolving credit / seasonal overdraft

Best for recurring seasonality. Flexible drawdowns; repay after peak trading. Lower setup cost than multiple short loans. Requires lender comfort with trading cycle.

Invoice finance

Works if you invoice corporate accounts (conference bookings or corporate catering). Unlocks cash tied in receivables during slow months.

Asset refinance / sale & leaseback

Raise capital from property or equipment while retaining use. Useful when you need investment (refurbishment, new kitchen) but don’t want to increase secured mortgage balance.

Commercial mortgage rework

Negotiate a new mortgage to extend term or add seasonal interest‑only periods. Good when property value and occupancy support lending.

Blended approach

Often best: a base long‑term mortgage or term loan for lower‑cost funding, plus a short‑term seasonal facility for peaks and troughs.

Pros & cons at a glance

• Cost: long‑term options are cheaper; short‑term facilities cost more.
• Speed: merchant cash advances and invoice finance are fast; mortgages take longer.
• Security: mortgages and asset refinance usually require security; overdrafts may be unsecured depending on lender.
• Effect on cash flow: extending term reduces monthly burden; seasonal facilities provide targeted liquidity.

Get a free eligibility check to see which mix suits your hotel.

Who can refinance — eligibility & what lenders look for

Lenders and brokers assessing hospitality refinance typically review trading history, occupancy and ADR (average daily rate), management experience, accounts, and the property or asset value used as security.

Common eligibility factors

• Minimum trading history: often 2–3 years (some specialist lenders accept seasonal records).
• Annual turnover and profitability trends.
• Occupancy trends and forward bookings.
• Property valuation or quality of assets.
• Credit history and any previous insolvency or arrears.

Lenders will usually ask for management accounts, 12–36 months of bank statements, occupancy data, business plan showing seasonal projections and details of existing loans.

If you need tailored matches, submit a short enquiry and we’ll connect you with brokers and lenders who specialise in hospitality. Start your enquiry.

Costs, timings and risks

Costs to expect

• Arrangement and broker fees (1–3% common on mortgages/large loans).
• Valuation, legal and survey fees.
• Exit fees or early repayment charges on existing facilities.
• Interest cost differences — short‑term facilities often more expensive.

Timings

• Quick facilities (invoice finance, some revolving lines): days to 2 weeks.
• Bridging loans: typically 1–3 weeks for straightforward cases.
• Commercial mortgage refinance: 6–12+ weeks depending on valuation, legal work and lender underwriting.

Risks

• Over‑leveraging — borrowing too much increases vulnerability to future shocks.
• Interest rate risk if switching to variable rates.
• New covenants or security requirements that reduce flexibility.
• Costs may outweigh benefits if not structured correctly.

We do not provide regulated advice. Lenders make the final decision and formal applications may require credit checks.

Practical checklist — what to prepare before refinancing

• Last 2–3 years’ filed accounts (or management accounts for seasonal variance).
• 12–36 months of business bank statements.
• Cashflow forecast showing seasonal highs & lows.
• Occupancy and ADR data, forward bookings.
• Existing loan agreements, repayment schedules and security details.
• Asset list (fixtures, fittings, plant) and property title/lease details.
• Explanation of intended use of funds (e.g., smoothing payroll, refurbishing).

Small preparation steps (tidy payroll records, explain seasonal strategy, show cost controls) often improve lender outcomes.

Case study — illustrative example

Hypothetical: “Seaview Hotel”, 40 rooms, seasonal occupancy: 85% summer / 40% winter. Faced with winter cash shortages and planned roof works in October, the owner used a blended refinance:

1. Re‑negotiated commercial mortgage to a longer term with seasonal interest‑only windows (reducing winter repayments by ~30%).
2. Secured a £100k revolving seasonal overdraft to carry payroll in low months.
3. Used sale & leaseback on a recently upgraded kitchen to raise £50k for the roof works, repaid over 5 years.

Outcome: winter cashflow stabilised, maintenance completed without urgent expensive short‑term borrowing. Illustrative and anonymised.

How UK Business Loans helps

We’re an introducer — we connect hospitality businesses with lenders and brokers who specialise in commercial and seasonal finance. Our free enquiry is quick: you provide a few details, we match you to partners likely to suit your needs, and they contact you with options.

There’s no obligation and no cost to enquire. Lenders make the final decision and may carry out credit or property checks. Get a free eligibility check and we’ll introduce you to suitable partners.

Privacy: we handle your data securely and only share it with selected finance partners relevant to your enquiry.

FAQs

Can I refinance if I have imperfect credit?

Possibly. Specialist lenders and brokers work with less‑than‑perfect credit records, but terms may be pricier and security requirements higher. A free eligibility check will show matched options.

Will refinancing affect my credit score?

Submitting an enquiry with us does not affect your credit score. Lenders may perform checks during formal applications that can show on your file.

How quickly can I get funds for seasonal needs?

Fast options like invoice finance and merchant cash advances can deliver in days; overdrafts and bridging loans in 1–3 weeks; full mortgage refinances typically take 6–12+ weeks.

Is refinancing usually cheaper than an overdraft?

Long‑term refinancing is generally lower cost per annum than prolonged overdraft use. Overdrafts are useful for temporary needs, while refinancing is better for structural improvements to cash flow.

Can I refinance without using my property as security?

Some unsecured options exist (short term or based on trading strength), but larger amounts or lower rates usually require security such as property or business assets.

Get matched for a free eligibility check to discuss your situation with specialist lenders and brokers.

Ready to explore refinance options?

Get Quote Now — Free Eligibility Check

UK Business Loans introduces businesses to lenders and brokers; we do not lend and we do not provide regulated financial advice. Submitted details are shared with selected finance partners and offers are subject to lender approval and possible credit checks.