The biggest loan that we have ever given to a customer was in the region of £500,000 to a customer who wanted to purchase and redevelop many of the seaside residences near the beach to begin a hotel chain. The reason we were so intrigued with this customer is because instead of creating a hotel chain in the traditional sense, he wanted to purchase all the properties to list on AirBnB.
AirBnB is a great website because you can book hotels or villas and pay on a per day basis through your phone. If you decide you want to stay an extra day or two somewhere and the residence is not already booked, you can just book it directly on the app and it’s done. There is so little hassle involved in using AirBnB and there are such strict quality control rules in place that it ends up being better than looking at hotel comparison websites.
The website is also great for another reason. You can charge a lot more. So, while most lenders would be scared to borrow such an amount, we started to work WITH the customer to process and analyse just how much the residential properties could make daily, a monthly basis and then annually. It turns out, that £500,000 could be repaid within two summer seasons, and it was.
This is where being a smart lender comes into power. We immediately saw the potential profits involved in the selections and decided to upsell the loan amount which was originally £350,000 and increase the interest rate, claiming it was due to the overall amount that we already raised ourselves.
While you may think it is shady, we already knew he was going to make a lot of money. We need to stay profitable. I am very happy to say, to this day we still reap the benefits.