How to buy a pub: ownership options, finance and opening steps
To buy a pub, first decide whether you want the freehold, a free-of-tie lease or a tied tenancy, as this sets how much you need to raise. Check the…
Hospitality
Pub and bar loans for refits, stock and buying a pub
Finance for pubs and bars: refits, cellar and dispense kit, seasonal stock, VAT bills and buying a freehold or lease, and how lenders view wet and dry sales.
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- Amount
- From £10,000 to £10 millionLarger amounts through secured, property and asset-based finance
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In short
What a pub can borrow depends on how it is held and how it trades.
A freehold purchase usually needs a pub or commercial mortgage and a deposit; a free-of-tie lease is often bought with a business loan; tenants mainly fund ingoing costs and kit. For refits, stock and VAT bills, lenders look at card takings, the split between wet and dry sales, and any pub company tie.
- Refurbishing the bar, beer garden
- Cellar cooling, dispense systems, glass
- Building stock ahead of busy periods
- Marketing, events and live entertainment
- Recruitment and training
“He is fair and always gives advice that is in the best interest of his clients.”
About pub and bar loans
Bar and pub loans are business finance for pubs.
Bar and pub loans are business finance for pubs, bars and licensed venues: funding for refurbishments, cellar and kitchen equipment, stock, marketing, staffing, VAT bills and buying a pub. Options range from unsecured loans and merchant cash advances to asset finance, revolving credit and pub mortgages. Smart Funding Solutions is a broker, not a lender: we approach lenders, including hospitality specialists, whose appetite suits your venue and how you hold it.
Pubs and bars have their own financial rhythm. Wet sales and food sales carry very different margins, stock is bought with duty already in the price, and takings swing with the weather, the football calendar and the run-up to Christmas. Tied tenants also have obligations to their pub company that lenders will want to understand. For finance across the wider sector, see our hospitality business loans hub.
Funding needs
What pub and bar finance is used for
- Refurbishing the bar, beer garden, toilets or letting rooms
- Cellar cooling, dispense systems, glass washers and kitchen equipment
- Building stock ahead of busy periods such as summer, major sporting events and Christmas
- Marketing, events and live entertainment
- Recruitment and training
- Spreading a VAT or tax bill
- Buying a pub, a lease or an additional site
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- Whole-of-market search across 300+ lenders
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A transaction we arranged
£35,000
£35K secured on the business premises, not the family home.
A pub and B&B wanted secured funding but needed clarity on where the security would sit. The charge went on the trading property.
Read the transaction- Sector
- Pub and B&B
- Structure
- First-charge secured loan
- Outcome
- Kept off the director's home
The operating cycle
Where finance fits into your pub and bar
Cash leaves the business at every stage before it comes back. Each stage below is a point where the right facility can carry the gap.
-
01 Win work
Orders, contracts or customers secured.
-
02 Buy in
Stock, materials and equipment paid for up front.
Asset finance → -
03 Pay people
Wages and suppliers paid on time.
Working capital → -
04 Deliver
The work is done or the goods are sold.
-
05 Get paid
Customers pay, sometimes weeks later.
Invoice finance → -
06 Tax
VAT and Corporation Tax fall due.
HMRC loans → -
07 Invest
Growth, a new site or new equipment.
Business loans →
Funding needs
Funding options for pub and bars
Choose the need, and we’ll show you how lenders usually structure it.
Explore this section
In this section
More detail on specific needs within this topic.
Pub mortgage: finance to buy a freehold pub
A pub mortgage is a long-term commercial loan used to buy or refinance the freehold of a pub, secured on the property. Lenders value the pub as a trading…
Finance options for pubs and bars
01
Unsecured business loans
An unsecured loan gives you a lump sum repaid in fixed monthly instalments, with no charge over property. It is often the quickest form of term funding. Lenders usually ask for a personal guarantee from directors or owners, which makes you personally liable if the business cannot repay.
02
Merchant cash advance
Most pub and bar takings are now by card, which makes a merchant cash advance a popular option. You receive an advance based on your average card sales and repay it through an agreed percentage of future card transactions. In a quieter month you repay less, and cash takings are unaffected. The flexibility comes at a cost, so compare the total repayable with a term loan.
03
Revolving credit facility
This works like an overdraft: you have an agreed limit and can draw and repay as often as you need. Some facilities are interest-only for a period; others require capital and interest on what you have drawn. It suits seasonal stock purchases and short-term gaps.
04
Asset finance
Asset finance spreads the cost of equipment and vehicles. With hire purchase you own the asset once the final payment is made; with lease purchase there is usually a final balloon payment to take ownership. VAT can often be paid upfront or spread, depending on the agreement. If you already own equipment or have it on finance, refinancing can release cash from it.
05
VAT and tax loans
A VAT quarter after a strong trading period can be large. A VAT loan spreads the payment to HMRC over a short run of monthly instalments, so you pay on time without draining working capital.
Buying a pub: freehold, leasehold and tenancies
How you hold the pub affects the finance available:
- Freehold: buying the building and business outright is usually funded with a commercial or pub mortgage secured on the property, plus your own deposit.
- Free-of-tie lease: buying a lease is often funded with an unsecured or secured business loan, based on trading figures and the lease terms.
- Tenancy or tied lease with a pub company: entry costs are usually lower, and working capital, fixtures and ingoing costs can be funded with loans or asset finance.
Where a purchase needs to complete quickly, bridging loans can provide short-term funding until a longer-term mortgage is in place. Our article on how to buy, fund and open a pub walks through the process.
Government-backed support
The Growth Guarantee Scheme is delivered by the British Business Bank through accredited lenders and gives those lenders a partial government guarantee on eligible facilities. The borrower remains fully liable for the debt. Check the British Business Bank for current availability.
Underwriting
What lenders look at
01
How long you have been trading, and your accounts or management figures
02
Monthly turnover and card takings, shown in bank and merchant statements
03
The split between wet and dry sales, and gross margins on each
04
Business and personal credit history
05
Current liabilities, including any brewery or pub company arrangements
06
For purchases, the price, lease or title, trading history and your experience in licensed trade
Lenders read the same pub differently. A tied lease can worry a lender that does not understand pub company obligations, while a hospitality specialist will look at the rent, the tie and the barrelage alongside the takings. Individual lenders also set their own minimum trading periods and turnover levels.
How the process works with us
- Tell us what you need, whether that is a refit, cellar kit, stock for a busy season or a pub purchase.
- Share recent bank and card statements, and your lease or tie agreement if relevant.
- We identify suitable lenders on our panel and approach them on your behalf.
- We present the options with total costs and conditions side by side.
- The lender makes the final decision; decisions can come within a few working days once it has everything it needs, and funds can follow shortly after signing.
It is free to enquire; any broker fee is disclosed separately before you proceed. To discuss your requirement, you can start an enquiry online.
FAQs
Questions clients ask
Can I get a pub loan with bad credit?
Possibly. Some lenders focus on recent turnover and card takings more than past credit problems, particularly for merchant cash advances. Adverse credit usually means fewer options and higher costs. Being upfront about your history and showing steady trading will strengthen your application.
How much deposit do I need to buy a freehold pub?
There is no single figure, because each lender sets its own limits based on the pub's trading record, the property's value and your experience. A freehold pub purchase is usually funded with a commercial or pub mortgage plus your own deposit, and you also need money for stamp duty, fees, stock and working capital. Our commercial mortgage calculator helps you estimate repayments at different deposit levels.
Can a pub tenant get pub and bar loans?
Yes, tied tenants and leaseholders can borrow, mainly for ingoing costs, equipment, refurbishment and working capital. Because a tenant does not own the building, lending is usually unsecured or secured on equipment, and lenders look at trading figures, the lease or tenancy terms and the obligations to the pub company. A personal guarantee is usual for unsecured borrowing. Our unsecured business loans page explains how these loans work.
Can a first-time publican get finance to buy or run a pub?
Yes, but first-time publicans have fewer options than experienced operators, so lenders lean on your hospitality or management background, a detailed business plan and your own contribution. A tenancy or free-of-tie lease is often a more realistic first step than a freehold. Lenders also check the premises licence and who will be the designated premises supervisor. Our guide on how to buy, fund and open a pub covers the process.
How long do pub and bar loans take to arrange?
Unsecured loans and merchant cash advances for pubs and bars can be arranged within a few working days in straightforward cases, once the lender has bank statements, card takings and accounts. A pub mortgage for a freehold purchase takes longer because it needs a specialist valuation and legal work. Applying well ahead of busy periods such as summer or Christmas gives time to compare lenders. Our merchant cash advance page explains card-based funding.
Relevant transactions
See more related deals More deals like this
£38K further advance, repaid as a share of card sales.
An existing hospitality client needed more capital. The lender sized it on current card takings and the repayments already running.
Further advance, percentage of salesRead the transaction
£30,590 for a London hospitality operator.
Card receipts move with trading, so the funding needed to fit that profile.
Business facilityRead the transaction
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What our clients say
“Simon was fast, kept us updated at all stages and was a real pleasure to work with on our asset finance. I highly recommend this company: excellent service all round.”
“Spoke with Simon, who managed to get me the loan I needed promptly. The whole process was very smooth and was completed within a few days.”
“Getting a business loan can feel like a bit of a minefield, but everything was broken down for me in great detail. Will use again in the future!”
“Simon was a pleasure to deal with and helped us find a business loan that matched our growth goals and future expansion plans.”
“I couldn’t source funding for my business, but the team got in touch within an hour and had it sorted within 24 hours. Fantastic service, and I would definitely use them again.”
Why businesses choose Smart Funding Solutions
- Access to 300+ lenders
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- No obligation discussion
- Free to enquire