What is Pub Funding?

A pub is a unique business and pubs vary significantly from the traditional local to the country pub, a city wine bar to a national chain. As you would expect, there are different types of funding available to pubs from a wide source of lenders.

Commercial Pub Mortgage

Publicans can obtain Commercial Mortgages, secured on the freehold business premises, for a number of different reasons:

  • Repayment of a brewery loan
  • Consolidation of existing loans
  • Buying out a retiring shareholder / partner
  • Sitting tenant wanting to acquire the freehold
  • New purchase / auction purchase
  • Premises refurbishment or extension
  • Releasing equity in the premises to assist with working capital
  • Use additional funding as a contribution to acquire another pub

Key points for Pub funding are as follows: -

  • Up to 65% of the “Going Concern” value of the business or up to 70% of the Bricks and Mortar only valuation.  All subject to meeting the Lenders serviceability criteria.
  • Competitive interest rates and arrangement fees.
  • Access to a wide choice of lenders to secure the best deal for you.
  • Flexible repayment terms up to 25 year funding.
  • Very easy application – just click the enquiry form and leave the rest to us.
  • No upfront fees!

Brewery Loans

Traditionally the large breweries have provided loans to publicans. These brewery loans are at a relatively low rate of interest making them an attractive option for pub finance. In exchange for the low interest rate, the publican is contracted to buy all beer, wines and spirits from the brewery at full price.

Brewery loans are also structured whereby interest rates are reduced even further provided target sales are met.

Due to consolidation in the brewery sector, many tied pubs have been sold off. These independent pubs are now free to source their own suppliers, and breweries are competing for their business by offering discounts to pubs. Sometimes these discounts can be quite substantial for volume purchases.

Brewery loans used to be a cost effective way of financing a pub, and still have an important part to play with smaller pubs. However many pubs are now finding that it is much more cost effective to replace brewery loans with a Commercial Mortgage. This has the advantage of not being tied to one supplier and the ability to receive improved margins due to receiving supply discounts.

We look forward to discussing your proposition with you.

Please call us on 0844 4144382 or complete our enquiry form.