According to British Beer & Pub Association statistics (January 2009), there are approximately 57,500 pubs in the UK. In recent years we have seen a significant switch from managed houses to leased/tenanted operations. Business finance in the licensed sector is becoming more flexible to incorporate the needs of the leasehold market.
We understand that when purchasing a pub business you are buying more than just the property itself. Our business mortgage options are designed to cover the licence, the goodwill and fixtures and fittings, as well as the building itself.
Main Features
Freehold |
Leasehold |
The terms of a commercial loan against a public house vary considerably from lender to lender but, as a general rule, the following will apply to a freehold business:
- 60% - 70% loan to business value ratio
- 15-30 year mortgage term
We are experienced in offering financial solutions for purchases, remortgages, debt consolidation, capital raising (extensions) and cash injections across the public house sector. |
Many lenders do not recognize leasehold premises as holding any value from a security perspective. We often successfully deal with this issue by utilizing any additional freehold security clients hold and/or by utilizing the Government’s Enterprise Finance Guarantee Scheme. The following should serve as a guide:
- Up to 50% loan to business value ratio
- 15-30 year mortgage term
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Factors Affecting Your Loan Application
There are a number of factors which can help to make your application more attractive to a lender:
- A deposit of 30% or more
- Additional security*
- Business plan
- Proof of experience
- Good credit history
- Two years' trading accounts or strong income projections
- Strong proposal from Christie Finance
*If security is not available it may be possible to seek assistance from your brewery by way of an 'advance of discount loan'.
When assessing a public house mortgage application, any lender will also have to take into account the following:
- Good trading location
- Is the building a stand-alone property, or part of a complex?
- Industry-recognised qualifications such as The National Licensee's Certificate
- If the pub is closed, they will have to take into account the cost of re-opening
Go to 'Our Offices' to find your local business mortgage representative now.
Christie Finance – The intelligent choice
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