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Pub finance covers the different types of business funding available to help you buy, refurbish or run a pub. This could be a commercial mortgage to buy a freehold, asset finance for new equipment or a merchant cash advance based on your card takings.
The type of funding you need will depend on what you're paying for, whether you own or lease the property and how your pub trades throughout the year. This guide explains the main types of pub finance, how to fund a purchase or refurbishment, manage seasonal cash flow, prepare an application and understand the costs involved.
What is pub finance?
Pub finance isn't a single type of funding. It covers the range of finance used by pub owners, landlords, tenants and bar operators to cover the costs of running licensed premises. You might need a larger, longer term loan to buy a freehold pub, or a smaller amount to replace a cellar cooling system ahead of summer. Some types of finance are secured against property or equipment, while others are unsecured and based on your business's trading performance.
Capitalise works with a panel of 130+ UK lenders, giving you the opportunity to compare different finance options in just one application, based on what you need the money for.
Which types of pub finance are available?
There are several types of finance that can be used by pubs and bars:
Type of pub finance | How it works | Typical amount and term | Best suited to |
|---|---|---|---|
A lump sum repaid in fixed monthly instalments, secured or unsecured | Up to £1m+, over 3 months to 10 years | Refurbishments, expansion, buying a lease | |
Commercial mortgage | A long term loan secured against the pub building | Terms of up to 25 years, usually with a deposit of at least 25% | Buying or refinancing a freehold pub |
An advance repaid as a percentage of your daily card sales | Up to £1m+, repaid as you trade | Pubs with strong card takings and seasonal income | |
Asset finance | Funding for equipment, repaid monthly and secured against the asset itself | £1,000 to £2m, over 3 months to 10 years | Kitchen equipment, cellar systems, furniture, EPOS |
A flexible facility you draw from and repay as needed | Varies by lender | Stock, wages and bills between busy periods | |
Bridging loan | Short term property finance repaid when longer term funding or a sale completes | Usually months rather than years | Buying a pub quickly, often at auction |
How do you get finance to buy a pub?
The funding available will depend on whether you're buying the freehold or taking on a lease or tenancy.
Buying a freehold pub
If you're buying the freehold, you'll own the building and land, so a commercial mortgage for your pub can be used to fund the purchase. Lenders will typically require a deposit and may offer repayment terms of up to 25 years. They'll also look at the pub's trading history, including its accounts and turnover, as well as the value of the property. If you need to complete the purchase quickly, such as when buying at auction, a bridging loan can provide short term funding while longer term finance is arranged.
Taking on a leasehold or tenanted pub
If you're taking on a lease or tenancy rather than buying the freehold, a commercial mortgage won't apply because you don't own the property. A business loan can be used to cover some of the upfront costs involved in taking on the pub, including:
Lenders may also look at how much time is left on the lease compared with the proposed loan term.
How can you fund a pub refurbishment?
Refurbishment is a common reason for pubs to look for finance, whether you're redecorating the premises, replacing a kitchen or upgrading an outdoor area. For building work and general refurbishment, a business loan can provide a lump sum upfront, which you then repay in fixed instalments. For equipment, asset finance can be used to spread the cost over time. Depending on the agreement, the equipment itself can act as security for the funding. This can be used for items such as commercial ovens and fryers, cellar cooling systems, beer lines, glasswashers, furniture, EPOS equipment and outdoor heating. Many pubs combine the two, using a loan for the building work and asset finance for the kit, which keeps each repayment matched to what it's paying for.
How can pub finance help with cash flow and seasonal trading?
Income for pubs can change throughout the year depending on the season, weather and major sporting events, while costs such as rent, wages and supplier bills still need to be paid. A merchant cash advance can be one way of managing this type of cash flow. Instead of fixed monthly repayments, you repay an agreed percentage of your daily card sales. This means repayments increase when card sales are higher and reduce when they're lower. A business line of credit provides another option. You can draw from the facility when you need it, such as when buying additional stock ahead of a busy period, rather than taking the full amount upfront.
Before you borrow to cover running costs, it's worth checking your business rates bill. Pubs in England can get 15% off their business rates in 2026 to 2027, with bills then frozen in real terms for the following two years. If that relief isn't showing on your bill, contacting your local council could reduce how much you need to borrow.
What do lenders look for when you apply for pub finance?
Every lender has its own criteria, but most will look at the same core areas when you apply for pub finance:
How much does pub finance cost?
The cost of pub finance depends on the type of funding, whether it's secured, how long you borrow for and your pub's trading and credit profile. The figures below are example ranges only, and the rate you're offered will vary by lender.
Type of pub finance | Example cost |
|---|---|
Unsecured business loan | From 7% up to 99%+ |
Secured business loan | From 5% to 15% APR |
Merchant cash advance | A fixed fee, often shown as a factor rate of around 1.10 to 1.35 |
With a merchant cash advance, a factor rate of 1.20 on a £20,000 advance would mean repaying £24,000 in total, taken as a share of your card sales until it's cleared.
On top of interest, check for arrangement fees, valuation fees on property finance, and any early repayment charges. Comparing the total amount you'll repay, not just the headline rate, gives you the clearest picture.
How Capitalise helps you find pub finance
Whether you're buying a pub, taking on a lease, planning a refurbishment or managing seasonal cash flow, With Capitalise you can compare finance options from a panel of 130+ UK lenders in one place. Just tell us how much you need and what you need it for, and we'll match you with lenders most suited to your needs.
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