Can you refinance a hotel in its first year of trading? What a £10m Cotswolds deal shows

On 3 November 2026 Pallas Capital announced a £10 million refinance of Dumbleton Hall, a 34-bedroom country house hotel in the Cotswolds that reopened in April after a full renovation. The new facility is there to carry the hotel through its first months of trading. Refinancing a hotel, pub or restaurant soon after a refurbishment is one of the harder deals to place, because the business has little trading history in its new form. Here is how the deal worked, what lenders look at, and how smaller hospitality owners can do the same. Smart Funding Solutions is a broker, not a lender. We compare whole of market options and arrange business finance from £10,000 to £20 million.

01What happened at Dumbleton Hall?

Dumbleton Hall sits in 16 acres in the Cotswolds. During the refurbishment the room count fell from 38 to 34 to create larger suites, and plans for woodland and garden lodges are being drawn up, according to Property Reporter. Since reopening in April 2026 the hotel has been listed in the 2026 Michelin Guide and shortlisted for Best New Hotel at the Boutique Hotelier Awards 2026.

• The facility. A £10 million refinance from Pallas Capital to support the hotel through its trading ramp up.
• The works. Savills valued the hotel, and a monitoring surveyor is overseeing a refurbishment tranche within the facility.
• The lender's view. Jamie Peacham, senior underwriter at Pallas Capital, said "Pallas looked beyond the figures, taking the time to understand both the property and the vision behind its future growth."

The sponsor, Paul Vezolles, called the refinancing "an important milestone for Dumbleton Hall."

02Why is a hotel in its first year of trading hard to refinance?

Most lenders price a hotel loan on its trading record, usually two or three years of accounts. After a renovation that record no longer fits the business. Room numbers, prices and costs have all changed, so the old figures say little about the new hotel, and the new figures cover only a few months.

The money spent on the works is often borrowed short term, through refurbishment bridging finance or a bridging loan, and that loan has to be repaid on time. Our guide to bridging loan exit strategies explains why the exit should be planned before the works start. If the hotel is not ready for a long-term mortgage when the bridge ends, owners look at re-bridging or a specialist refinance like this one.

03What do lenders look at when they refinance a hotel or restaurant?

Where the history is short, lenders lean on other evidence. These are the points most underwriters test.

• Early trading. Monthly management figures since reopening, occupancy, room rates, covers and forward bookings.
• The people. The track record of the owner and of the operator or management team running the business.
• The valuation. An independent valuation of the property as a trading business, which sets the loan to value.
• Affordability. Whether profits cover the interest with room to spare, known as interest cover. The DSCR calculator shows how lenders test it.
• The plan. A realistic cash flow forecast showing how trade builds to the level the long-term loan needs.

Our guide to the financial ratios lenders use covers these tests in more detail.

Most lenders price a hotel loan on its trading record, usually two or three years of accounts.

04How do you refinance a hotel, pub or restaurant?

The route depends on how far the business has come since the works finished.

• Still building trade. A specialist or interest-only facility for one to three years gives the business time to show a full year of trading.
• Trading well. Hotel refinance onto a commercial mortgage replaces short-term debt with a longer, cheaper loan. The commercial mortgage calculator shows the repayments.
• Several loans. Refinancing business loans or debt consolidation can roll several debts into one payment.
• Kit already owned. Asset refinancing releases cash from kitchen equipment and furniture paid for during the works.

Before you switch, ask your current lender for a redemption statement and check for any early repayment charge.

05Can smaller hospitality businesses refinance the same way?

Yes. The loan sizes are smaller, but the questions are the same for a B&B, a village pub or a restaurant that has just been refitted. A refurbished venue with a few months of strong trading and a credible plan can often refinance sooner than owners expect.

• B&B and guesthouse finance
• Pub mortgages and bar and pub loans
• Restaurant loans
• Wedding venue finance
• Buying a hotel, for owners looking at their next site

06Are hotels doing better than the rest of hospitality?

On venue numbers, a little. The NIQ Hospitality Market Monitor for the third quarter of 2026 found licensed hotels up 0.2% over the year, and holiday and caravan parks up 0.7%, while Britain lost 977 licensed venues overall. Our report on 19 hospitality venues closing a week sets out what that means for pubs and restaurants.

Costs are rising for hotels too. From April 2027 retail, hospitality and leisure properties in England, hotels included, get lower business rates multipliers and bills capped by inflation for two years, according to the government's information letter to councils. Our Budget 2026 summary covers the rest, and our hospitality business loans page covers working capital for the quieter months.

07What does this mean for your funding?

If you have refurbished a hotel, pub or restaurant on short-term money, start planning the refinance as soon as the doors open, not in the last month of the bridge. Keep monthly figures from day one, because early trading is the evidence a lender will lean on. If trade is still building, a specialist facility can buy the time to reach a cheaper long-term loan.

See how much your business could borrow, then get your Instant Quotes to see your lender matches instantly, with no credit check. A broker then searches the wider market for you. Read how Instant Quotes work if you are new to it. Lenders make every decision, and all finance is subject to status.