How to buy a pub: ownership options, finance and opening steps

Buying a pub means acquiring either the freehold of the building and business, the lease of a free-of-tie pub, or a tied tenancy from a pub company or brewery. This guide is for first-time buyers and experienced licensees who want to understand the steps, the costs and how pub purchases are usually funded. Smart Funding Solutions is a commercial finance broker: we search our panel of lenders for commercial mortgages, loans and equipment finance that fit the deal you are buying.

01Freehold, leasehold or tenancy: which way should you buy a pub?

The structure you choose shapes how much you need to raise and what type of finance lenders will consider.

02Finding the right pub

Research the area: local population, competition, footfall, parking and tourism. Specialist licensed-trade agents can help. Look closely at the building's condition, kitchen and cellar, any letting rooms or living accommodation, and the existing premises licence and its conditions.

03Due diligence checklist before you buy

Research the area: local population, competition, footfall, parking and tourism.

04Working out costs and profit potential

Build your own forecast rather than relying on the seller's. Include:

• purchase price or lease premium, legal and survey fees, and stamp duty where applicable;
• refurbishment, equipment and opening stock;
• rent or mortgage payments, business rates, utilities, insurance and staff;
• realistic sales by season, and a break-even point.

A clear business plan built on these figures is what lenders will assess.

05How pub purchases are funded

Most buyers combine a personal deposit with one or more types of finance. Our pub and bar loans page explains each option for established pubs in more depth.

• Commercial mortgage: for buying a freehold, secured on the property and repaid over a longer term.
• Secured or unsecured business loans: for a leasehold premium, refurbishment or working capital.
• Asset finance: to spread the cost of kitchen equipment, cellar cooling, tills and furniture.
• Bridging finance: to move quickly on a purchase, with a planned exit onto longer-term borrowing.
• Working capital finance: for opening stock, marketing and seasonal gaps.

06What lenders assess when you buy a pub

• Your licensed-trade or hospitality management experience.
• The size of your deposit and where it comes from.
• Personal and business credit history.
• The property's valuation, condition and alternative use value. Lenders with a strong licensed-trade appetite may value a pub on its trading potential, while others lend mainly against bricks-and-mortar value, which is why offers on the same pub can differ widely.
• The pub's trading history, or the strength of your forecasts if it is closed or new to you.
• Whether repayments are affordable in the quietest months, not just at peak.

07Documents lenders usually ask for

08Licensing and the legal side

Instruct a solicitor experienced in licensed premises to deal with the purchase or lease. In England and Wales, a pub needs a premises licence, and the designated premises supervisor must hold a personal licence. You will need to transfer or vary the licence into your name and check its conditions. Your local council handles licensing; GOV.UK explains the basics. You will also need to register as a food business if you serve food. Scotland and Northern Ireland have separate licensing systems.

09Getting ready to open

1. Hire the team: bar, floor and kitchen staff, with right-to-work checks, payroll and training on licensing, food safety and service.
2. Prepare the premises: finish any refurbishment, test equipment and complete health and safety, fire safety and food hygiene checks.
3. Set up suppliers: if free of tie, compare brewers, wholesalers and food suppliers on price, quality and payment terms.
4. Hold a soft launch with friends and local contacts to test service and the menu.
5. Market the pub: local press, social media, events, quizzes, live music and map and review listings.
6. Review and adapt: track sales, margins and feedback, and adjust hours, menus and offers.

10How we help you fund a pub purchase