Pub finance for freehold and leasehold public houses
We arrange pub finance for operators, tenants and investors buying, refinancing or repositioning a public house. A pub is a trading business, so a lender values it as a going concern on its fair maintainable trade and sizes the debt on the trade the pub can hold, not on a bricks-and-mortar figure alone. We package the accounts, the wet and dry split and the tenure and place the case with the specialist pub lenders, whether it is a free house, a tied lease or a free-of-tie agreement.
Stabilising pubs
A pub is a trading asset where the building and the business are the same thing, so pub finance is underwritten on the trade first. A lender assesses the fair maintainable trade (FMT), the sustainable operating profit a reasonably efficient operator would achieve, capitalises it at a market multiple to reach a going-concern value, and cross-checks that against the bricks-and-mortar value the property would fetch in alternative use. The decisive variables are the wet and dry split, the volume the site turns, the rent or tie cost, and how much of the trade depends on the current licensee.
The pub market has held firm through a period of cost pressure. Average pub sold-price movement was broadly flat at about minus 0.4% over the twelve months to the 2026 Business Outlook, with drink-led venues up 1.0% over the year against a wider market that Christie & Co describes as polarised between activity at the top and bottom ends, and with around a third of pubs reporting profitability pressure (Christie & Co, Business Outlook 2026). Buyer demand into 2026 remains strong for the right sites, which supports both acquisition funding and the exit on a reposition.
How the pub is held shapes the finance. A freehold free house is financed on the going-concern value of the property and its trade and typically supports the keenest commercial mortgage. A tied leasehold pub, where the tenant buys beer through the pub company, is valued and lent on differently because the tie caps margin and the lease sets the term. A free-of-tie lease sits between the two. We structure each on its own basis rather than forcing one template across all three.
We package the trading accounts, the FMT assessment, the wet and dry split, the tenure and the operator's record so the specialist pub and hospitality lenders can price the case quickly. We run the market across commercial mortgage, acquisition, bridging and refinance lenders rather than approaching a single bank, and where the case suits a deeper pub-specialist review we can route it through our dedicated pub finance practice at Pub Property Finance (pubpropertyfinance.co.uk).
What we fund
- Freehold free houses bought on a going-concern basis
- Tied and free-of-tie leasehold pubs acquired or refinanced
- Wet-led and drink-led pubs with a strong bar trade
- Food-led and gastro pubs valued on blended FMT
- Pubs with letting rooms or an accommodation element
- Reposition and refurbishment of a tired or closed pub back to trade
Indicative terms
- Loan to valueIndicatively around 60 to 70% of going-concern value
- Valuation basisFair maintainable trade, cross-checked to bricks and mortar
- Debt service coverSized on the maintainable EBITDA the pub supports
- TermCommonly to 15 to 25 years on a freehold mortgage
- TenureFreehold, tied lease or free-of-tie all considered
- Key testsWet and dry split, FMT, operator, rent or tie cost
- RefurbishmentAcquisition plus works via a bridge, then a term refinance
Indicative only. Terms vary by lender, asset and scheme and are not an offer of finance.
How we arrange pub finance across purchase, refurbishment and refinance
We arrange pub finance around the trade and the tenure. For a freehold purchase we place a going-concern commercial mortgage, indicatively around 60 to 70% of value, sized on the debt service cover the fair maintainable trade supports over a term commonly to 15 or 25 years. For a pub bought without a full set of accounts, or one being reopened after a period dark, we structure acquisition and refurbishment bridging that funds the purchase and the works, buys time to establish a trading record, then refinances onto a term mortgage once the trade is proven. On a leasehold pub the lease length and the tie shape the structure, and asset finance can fund the cellar equipment, kitchen and fit-out separately from the property. We frame every figure as indicative and never as an offer; the terms depend on the wet and dry split, the FMT, the tenure and the operator.
What lenders assess on a pub
Lenders underwrite a pub on its fair maintainable trade, the wet and dry split, the tenure and the operator, then size the loan on the debt service cover the maintainable EBITDA supports against a going-concern valuation cross-checked to bricks and mortar. They read a wet-led free house differently from a food-led gastro pub or a tied lease, because the margin, the volatility and the alternative-use value all differ. They weigh how much of the trade would transfer to a new operator, the rent or tie cost, and the condition and reinvestment the site needs. As a broker with no exclusive tie of our own, we present the accounts and the trading story honestly and place the case with the pub and hospitality lenders whose appetite fits the site. We arrange the finance; we do not lend, and the commercial lending we arrange on a pub held as a trading business is unregulated.
From a repositioned pub to a stabilised trade and a term refinance
The exit on an acquisition or refurbishment bridge is a proven, stabilised trade and a refinance onto a long-term commercial mortgage, or a sale. A pub that reopens or repositions builds its trade over the first year or two, and once the fair maintainable trade is demonstrable a term lender will size long-term debt on it. The backdrop supports the exit: pub sold prices held broadly flat at about minus 0.4% over the year with drink-led venues up 1.0% (Christie & Co, Business Outlook 2026), and buyer demand for well-run sites into 2026 keeps the sale market open. Once the trade stabilises we term out the bridge onto a going-concern mortgage sized on the maintainable EBITDA, or arrange a refinance to release equity into the next site.
Finance that suits this asset class
- Commercial mortgagesGoing-concern term mortgage on a freehold or long-leasehold pub.
- Acquisition financeFunds the purchase of a pub as a trading business.
- Bridging financeBuys a pub without accounts, or one dark, and funds the works.
- RefinancingRefinances onto a term mortgage once the trade is proven.
- Asset financeFunds cellar, kitchen and fit-out separately from the property.
Stabilising pubs?
A view on fundability within one working day.
What drives a pub's numbers
A pub is a trading business valued on a going-concern basis, so the economics turn on fair maintainable trade, the wet-led and dry-led split, and the EBITDA a reasonably efficient operator would achieve. A wet-led community pub earns mainly from drink and lives on volume and cost control; a dry-led or food-led pub carries kitchen cost and behaves more like a restaurant. Christie & Co reported pub sold prices broadly flat, down 0.4% over the year to its 2026 Business Outlook, with drink-led venues up 1.0%, as steady revenue met rising employment and business-rates cost. A lender also weighs the tenure, whether freehold, leasehold or tied, and the property's alternative-use value. We model maintainable trade after a realistic operator's cost base.
Indicative pub finance and structures
Indicatively we arrange pub commercial mortgages to around 60 to 70% of going-concern value for a freehold trading pub, sized on the debt service cover the maintainable trade supports, with keener leverage for a strong, evidenced trade and a firm alternative-use value. For a purchase and refit, or a wet-to-food reposition, we arrange bridging or refurbishment finance across the works and the trade build, then a term refinance once the new trade is proven. Leasehold and tied houses attract narrower, more specialist appetite. These are market-typical, indicative structures and never an offer or a quoted rate; the terms depend on the trade, the tenure and the property.
Frequently asked questions
How to finance a pub?
A freehold pub is usually financed with a going-concern commercial mortgage, indicatively around 60 to 70% of value, sized on the debt service cover the fair maintainable trade supports. Where the pub has no full accounts, is being reopened or needs works, an acquisition or refurbishment bridge funds the purchase and the refit and buys time to prove the trade before a term refinance. A leasehold pub is financed on the lease and the tie, often with asset finance for the fit-out. We package the trade and the tenure and run the specialist pub lenders.
How much can you borrow to buy a pub?
The loan is sized on the trade, not a flat percentage. On a freehold going-concern basis a lender will commonly advance around 60 to 70% of value, but the binding test is the debt service cover the maintainable EBITDA supports, so a strong, well-evidenced trade borrows more than a tired site on the same price. The wet and dry split, the tenure and how much trade would transfer to a new operator all move the figure. We frame leverage as indicative and never as an offer.
Is leasing a pub a good idea?
Leasing lowers the entry cost against buying a freehold, but a tied lease caps your buying margin because you take beer through the pub company, while a free-of-tie lease trades a higher rent for open supply. From a finance angle the lease length and the tie set what a lender will advance, and the fit-out is often funded on asset finance rather than a mortgage. We arrange the finance and structure it to the lease; the commercial decision on whether to lease is yours.
What is the difference between a tied, free-of-tie and freehold pub for finance?
A freehold free house is financed on the going-concern value of the property and its trade and supports the keenest commercial mortgage. A tied leasehold pub is lent on differently because the tie caps margin and the lease sets the term, so leverage is lower and often shorter. A free-of-tie lease sits between the two, with an open supply but a higher rent. We structure each on its own basis and place it with the lenders comfortable with that tenure.
Can you get pub finance without trading accounts?
Yes, but it is structured around the missing history. Where a pub is sold without accounts, or has been dark, a lender leans on an FMT assessment, the alternative bricks-and-mortar value and your own operating record, and an acquisition or refurbishment bridge is often the right first step because it funds the purchase and buys time to build a trading record. Once the trade is demonstrable we refinance onto a going-concern term mortgage. Where a deeper pub-specialist view helps, we can route the case through our dedicated practice at Pub Property Finance (pubpropertyfinance.co.uk).
Do you charge for arranging pub finance?
We are a broker and introducer, not a lender, and we run the whole market rather than a single panel, so a case is placed with the pub and hospitality lender whose appetite genuinely fits the site rather than whoever pays most. The commercial finance we arrange on a pub held as a trading business is unregulated lending, and we are not FCA-authorised for it. Where a pub also includes living accommodation that will be your home, part of the case can touch the regulated perimeter, and we deal with that element through an FCA-authorised firm.
Stabilising pubs?
Tell us about the asset and the income plan and we will come back with a view on fundability and likely terms.