First Merchant Finance review: loans for hospitality, leisure and entertainment businesses

First Merchant Finance is a London-based specialist lender that has focused on hospitality, leisure and entertainment businesses for three decades, from takeaways and restaurants to bars, nightclubs and boutique hotels. It lends to established limited companies against the business's lease or freehold. Smart Funding Solutions is an independent broker, so we can put a First Merchant offer next to other hospitality funders and mainstream lenders before you decide.

01About First Merchant Finance

First Merchant Finance Limited says it was established in 1995 and describes itself as a specialist commercial lender with unique expertise in funding hospitality, leisure and entertainment businesses. It is based near Marble Arch in central London and does not take equity stakes in the businesses it funds.

What sets it apart is how it assesses a business. Its site says decisions rely on expert on-site analysis of each business and its trading records, not just the financial statements. That matters in hospitality, where a busy site with strong takings can look weaker on paper than it really is, and where a lease with years left on it has real value.

02Who First Merchant Finance funds

First Merchant groups its customers into four areas:

• Fast food: pizza, fish and chips, Indian, Chinese and Thai takeaways, all covered by our guide to takeaway business loans
• Hospitality: restaurants, cafes, boutique hotels and guest houses
• Leisure: wine bars, pubs and sports bars
• Entertainment: nightclubs, cocktail bars, live venues and cinemas

03What First Merchant Finance funds

Product	What it is for	Typical size	Typical repayment
Fast Business Loans	Buying or refinancing a business, refurbishment, equipment, working capital	From £100,000	Fixed monthly or weekly instalments
Creditline	A credit facility for ongoing business needs	£250,000 or £500,000	Agreed case by case

First Merchant says an initial interest-only period of 12 months is usually offered, which can ease cash flow while a refurbishment beds in or a newly bought site builds trade. Our guide to interest-only business loans explains how that structure works and what happens when capital repayments start.

Its business loans page lists a broad range of uses:

• Buying a leasehold business or freehold property
• Refinancing existing borrowing, including merchant service loans
• Refurbishing premises and buying equipment
• Working capital
• Expanding a portfolio of sites
• Buying out a partner
• Improving online and delivery services

Lending is secured by a first charge over the leasehold or freehold and a debenture over the limited company.

04Who First Merchant Finance suits (and who it may not)

First Merchant is a strong fit for an established hospitality operator trading through a limited company that holds a valuable lease or freehold: for example, a restaurant group refinancing card-takings advances into a structured loan, a pub operator buying a second site, or a nightclub funding a full refit. Owners whose accounts understate the strength of the business may benefit from its on-site approach.

It is less suited to:

• Sole traders and partnerships, since it only lends to UK registered limited companies
• Start-ups and new operators without a trading record
• Smaller needs under £100,000, where unsecured loans or a merchant cash advance may be simpler
• Businesses outside hospitality, leisure and entertainment

05What First Merchant Finance looks at

First Merchant's emphasis is on the business itself. Based on its site and typical practice in this sector, expect it to consider:

• Trading records and takings, often reviewed on site
• The lease: its length, rent and terms, or the freehold value
• Company accounts and bank statements
• Existing borrowing, including any card-takings advances
• The purpose of the loan and how it will improve or protect the business

06Pros and cons

Pros

• Deep specialism in hospitality, leisure and entertainment since 1995
• On-site assessment that looks beyond the accounts
• Usually offers a 12 month interest-only period at the start
• Can fund acquisitions, refinancing and refurbishments in one facility
• Does not take equity in your business

Cons

• Limited companies only
• Minimum loan of £100,000 for its business loans
• Secured on your lease or freehold, with a debenture over the company
• Only for hospitality and related sectors

07Applying through a broker vs going direct

You can apply on First Merchant Finance's website. Comparing first is sensible because hospitality operators often have more options than they realise, from bank lending and government-backed loans to specialist and sales-linked funders, each with very different costs and structures.

We search the market across 300+ lenders, present your trading story clearly to the lenders most likely to back it, and help you weigh up security, interest-only periods and total cost. Smart Funding Solutions is an independent broker and is not part of First Merchant Finance, which is one of the lenders on our panel. It is free to enquire; any broker fee is disclosed separately before you proceed. Start with our instant quotes tool to compare lenders in minutes.

08Alternatives to First Merchant Finance

• Capify: merchant cash advances and revenue-based finance that suit card-taking venues needing smaller sums without property security.
• iwoca: flexible unsecured business loans, often better for quick, smaller working capital needs.
• Together: a specialist secured lender worth comparing for freehold purchases or larger property-backed borrowing.

For a wider overview of funding for pubs, restaurants and hotels, see our hospitality business loans guide.