If you are considering purchasing a Bed & Breakfast, make sure to check out the new SBA 504 loan.  Under the new administration, they have cut their fees to .625% for origination of loans.  Additionally, their current rate is 5 1/4% FIXED for 20 years. 

This is a tremendous tool to use when obtaining financing for your new Bed & Breakfast!

We realize that many people reading this article may not have their own Bed & Breakfast at this time. However, it is never too early to start collecting information for what you do and DON’T want to have when you do purchase a property. There are many things to consider, but the following is one of my pet peeves!

Tip envelopes – If you ask many current Innkeepers that may say that they have tip envelopes and many guests repond and leave money. The question is how many people don’t leave money? I always get the feeling when I see an envelope that I am obligated to leave a tip and I don’t like it. It is an added pressure and I am suppose to be on vacation! If an Innkeeper has truly done their job, a tip will AUTOMATICALLY be left, with or without an envelope. So I say, don’t intiminate your guests…do an excellent job and the tips will flow!

When purchasing a Bed & Breakfast Inn, they are usually sold on a turnkey basis. However, the question of inventory does not always get included in negotiations and this is very important. Purchasing a turnkey business basically means that the Bed & Breakfast Inn should be furnished and able to be up and running when purchased. However, inventory is not always included in the purchase price. Everyday items currently in use at the Inn are included. However, unused/unopened inventory is purchased in addition to the purchase price of the Inn. This can include amenities, sheets, towels, gift area items, liquor (if they have a liquor license), and food items. So do not assume that the purchase price includes these items, as they usually do not. A majority of the time the cost of purchasing the inventory can be offset by advance deposits received from the seller at the time of closing on the purchase of the Inn or Bed & Breakfast.

If you are considering purchasing a Bed & Breakfast Inn, now is the time to run a credit report for yourself and see what you will find! One may be surprised to see exactly what happens when you apply for all of those credit cards that you know you will never use, but want to get the “discount of the day”. Well, it is time to clean everything up and get ready to move forward. Having multiple credit cards may actually hurt your rating. Additionally, there always seems to be that surprise account that you closed long ago that magically appears as being open. There are many sites available on the web to get your report so let’s get going!