Pub finance and pub mortgages

Pub finance is commercial lending used to buy, refinance or improve a pub, inn, bar or other licensed premises. The most common form is a pub mortgage, a loan secured on the freehold or a long lease and repaid over an agreed term. It is business lending, assessed on the trade and on the operator running it.

The same loan type covers village pubs, town-centre bars, gastropubs and inns with letting rooms. Lenders treat them as trading businesses, so the accounts, the licence and the operator's track record count as much as the building itself, and a pub that has stopped trading is assessed very differently from one that is busy.

Pub finance can also be used to fund a refurbishment, buy out a partner or release equity for another site.

Lenders assess a pub on its trading accounts, the operator's experience and the value of the property as a going concern. They look at turnover, wet and dry sales, margins and profit. A trading pub is usually valued on its fair maintainable trade, not only on the building (RICS valuation of trade related property guidance, accessed 20 Oct 2026).

The operator matters a great deal. Lenders want to see experience of running licensed premises, a business plan for a new operator, and a personal licence holder in place. A premises licence is needed to sell alcohol, and its conditions are reviewed as part of the lending (GOV.UK premises licence guidance, accessed 20 Oct 2026).

Lenders also check the building's condition, the flat or living quarters, the beer garden and car park, and any planning restrictions on use.

A free-of-tie freehold pub is usually the easiest kind to finance, because the operator owns the building and can buy drink from any supplier. A tied pub, where the owner or pub company sets where the drink comes from, limits margins, so lenders look harder at whether the trade supports the loan.

Leasehold pubs can be financed where the lease is long enough and assignable, but the lender lends against the lease rather than the freehold. Short leases and tenancies are rarely mortgageable, and buyers of those often fund the purchase from savings or unsecured business loans.

Buying a freehold from a pub company sometimes comes with a covenant restricting its future use, which the lender's solicitor reviews.

Pubs and inns with letting rooms combine drink, food and accommodation income, and lenders look at each stream. Rooms can smooth seasonal trade and raise the value of the business, but they also bring costs for staff, cleaning, safety and upkeep, and lenders check occupancy and room rates in the accounts.

A pub with several rooms can sit close to a small hotel or guest house in how it is assessed. The approach for smaller accommodation businesses is set out on the guest house and B&B mortgages page.

Living accommodation for the operator is common too, and lenders check it is separate from the letting rooms and suitable to live in.

Pub mortgages differ on loan-to-value, term, fixed or variable pricing, fees, and how lenders treat new operators, tied pubs and pubs that need work. High street business banks, challenger banks and specialist lenders all lend on pubs, and their appetite for licensed trade changes over time, so comparing current terms on the same case matters.

The cost of the loan sits beside other costs, such as stock, the licence, legal fees and any works. How pricing works across hospitality lending is covered on the hotel mortgage rates page.