Running a cafe in a residential mortgage House

[Gunsbi]

Hello there,
We bought an old pub with a mixed use permission in Sept 2007, but could only complete when it was changed to domestic only use (at the lender’s insistence). We however later decided to run café in part of the building (less than 20% of property) and changed back to mixed use, after fulfilling all planning and building regs, in Oct 2010. We only told the mortgage company after the café opened and they sent a letter demanding immediate redemption because we were in breach of some conditions. We asked for some time but have been unable to secure another mortgage for the property - because the cafe is a startup business. They have just written again with same demand.
What do you think we have to/should/can do? What can/might the mortgage company do? What is the most likely scenario and the worst case scenario? Any ideas & thoughts are welcome. Thank you very much.

[Richard Webster]

The worst case is that having jumped through the right hoops and you not having ceased the cafe use the mortgage company could take repossession proceedings.

You should simply cease the cafe use. Whatever possessed you to change the use without first consulting your mortgage lender - you had a residential mortgage - why did you think you could simply use the place as a cafe and still keep the mortgage?