Hospitality finance

Finance for hospitality businesses

Hospitality trades on seasonality, thin margins and property that's often as much a specialist asset as a business — freehold pubs and hotels are valued and financed very differently to a leasehold restaurant fit-out. We match the funding structure to which of those two worlds the business actually sits in.

Category: Sectors & audiences

Product: Business Loans

Loan size: £50k – £5m
Freehold LTV: Typically up to 65-70%
Assessment basis: EBITDA/multiple of profit for going concerns
Term: 5-20 years for property; 1-7 for equipment

Freehold acquisition vs leasehold trade purchase

Buying a freehold pub, hotel or restaurant is assessed largely on the trading profit and bricks-and-mortar security together, using a specialist licensed trade valuation rather than standard bricks-and-mortar comparables. Buying a leasehold trading business, by contrast, is closer to a business loan secured on goodwill and equipment, with far less asset backing — pricing and leverage differ substantially between the two.

Seasonality and cashflow lending

Seasonal trading patterns (coastal hotels, event-driven venues) make monthly-repayment term loans awkward when three winter months generate little income. Lenders experienced in hospitality will sometimes structure seasonal repayment holidays or align repayments to the trading calendar rather than a flat monthly schedule.

Refurbishment and kitchen equipment funding

Refits, extraction systems and commercial kitchen equipment are commonly funded through asset finance rather than cash, preserving working capital. Specialist lenders understand resale values for catering equipment, which supports better rates than a generalist asset lender unfamiliar with the sector.

Trading through cost pressure

Energy costs, staffing and business rates have squeezed hospitality margins hard in recent years, and lenders now scrutinise recent management accounts closely rather than relying on pre-pandemic trading history. A clear, current set of numbers — even if the trend shows recovery from a weaker period — carries more weight than historic performance alone.

Frequently asked

Can I get finance to buy a pub or hotel freehold?

Yes, using specialist licensed trade valuers and lenders who understand trading businesses; leverage is generally based on a blend of trading profit and property value rather than property value alone.

Is working capital finance available for seasonal hospitality businesses?

Yes — some lenders offer repayment structures aligned to trading seasons, and invoice or revenue-based finance can smooth cashflow through quieter months for businesses with predictable forward bookings.

How do lenders view recent hospitality trading history?

Closely — post-2020 trading has been volatile sector-wide, so lenders typically want at least 12-18 months of recent, clean management accounts rather than relying purely on older figures.

Can I fund a kitchen refit with asset finance?

Yes, commercial kitchen equipment, extraction and refrigeration are routinely funded on hire purchase or leasing terms, spreading cost over the equipment's useful life.

Do I need a licensed trade valuation for a pub purchase?

Most freehold pub, hotel or restaurant lending requires it — a standard residential-style valuation doesn't capture trading potential or licensed trade comparables correctly.

Discuss your hospitality funding

Call 0345 2690628 — we'll match your trading pattern and asset type to the right lender.

Call 0345 2690628 Send your deal details