ortus secured finance

Pub finance solutions for the individual

The food and hospitality sector has been severely impacted by the pandemic.

Restrictions on trading have impacted business turnover and, in some cases, ongoing costs have caused debt to accumulate and cash reserves to dry up. Given that the hospitality sector contributed around £59.3bn in gross value added to the UK economy  pre-Covid, we think it is an industry worth supporting.  

Pub finance for reopening post-lockdown   

As of 17th May 2021, hospitality venues have been able to reopen for customers indoors across England. This means six people, or two households, will be allowed to mix inside a pub or restaurant and enjoy dining inside — in the warm and out of the rain!  

However, many restrictions remain in place. All pubs must implement social distancing, clear signage for exits and entrances, one-way systems, and hand-sanitiser dispensers. 

These changes aren’t just about replacing the carpet or extending the available space, they’re about repurposing a space for a post-lockdown world. Operators are also finding their credit terms with suppliers — who have also been severely impacted — have changed. As such, many pub owners are having to take out business loans to meet these costs in preparation for welcoming customers once again. 

A challenging financing environment

Despite the need for pub finance solutions, many have struggled to raise finance or are left waiting for loan applications to be accepted. This is not necessarily the fault of lenders, which are often extremely busy with huge numbers of applications, however it does demonstrate the importance of smaller lenders that have a huge role to play.

Almost every type of business requires financing to grow and succeed, and pubs are no exception. Whether you are just starting out, taking on the family business or looking to expand, the right funding offers the support you need when you need it.  

When we established Ortus Secured Finance in 2013, our first product was a pub finance loan. We were known at the time as ‘the leisure specialists’ and, while our offering has since expanded significantly, we have never forgotten our roots.

We are also committed for the long haul and pride ourselves on being there for brokers and clients when it matters most. We’ve always given priority to the individual rather than the process, and so can often see the deal when others can’t. With offices in London, Manchester, Glasgow, and Belfast, you can speak with someone who knows your market and the unique challenges you face.  

Here, I have included some recent examples of pub finance solutions we have secured for our clients:

The Devil’s Stone Inn, Devon  

Loan amount: £220,000  
Term: 24 months  

After a successful career in London, our borrower was keen for a change of lifestyle. 
With an interest in the outdoors and an eagerness to become part of a village community, this property was the ideal opportunity for our borrower. It provided a successful bar and focal point in the area and could be supported by the local community and many visitors.  
Although primarily bar trade, the property had the capacity to offer a wide range of dining options and the potential for upper floors to be opened for short-term tourist lettings. Our borrower displayed a work ethic that ensured us they would make a success out of this venture.  

The Brass Monkey, Devon  

Loan amount: £200,000  
Term: 24 months 

This loan was required due to a change in career for our borrowers. With respective backgrounds in finance and electrical trade, along with experience working in the target acquisition on a part-time basis, this opportunity felt too good to miss.  
As a result of a retirement of the operators, our borrowers felt this was a great opportunity to buy a well-run pub with a loyal customer base. The vendor was also delighted to see the business pass to new landlords already popular with the regulars.  
Upon reopening, trade is expected to pick up where it left off. Our borrowers also feel there is the future potential for growth with the option of expanding the dining options.  

The Black Bull, North Yorkshire  

Loan amount: £100,000  
Term: 24 months 

The borrower has been involved in the hospitality trade for a few generations and, although this is their first venture into pub ownership, the family are on hand to help.   
The bar is well established within the local town and, while there are clearly opportunities to grow the business, the initial 12 months is all about getting to know the regulars for reliable, long-term custom that sees the business grow successfully.  

The White Swan, North Yorkshire  

Loan amount: £250,000  
Term: 24 months 

Rural Yorkshire has been a long-term love of our borrowers. When the opportunity to buy an established bar with an adjoining touring caravan site appeared, it was too good to miss.  
Located close to the Moors National Park and a short distance from Pickering, it is perfectly situated to pick up the tourist trade.  
Very much a lifestyle choice for this young family, the draw of this venture was running a business on their own terms. The borrower’s family have also been in the licenced trade for several generations and will be on hand to help.  

Wheatsheaf Inn, North Yorkshire  

Loan amount: £100,000  
Term: 24 months  

Our borrower has been running the bar as a tenant for a few years. The landlord decided to sell and our borrower felt this was a great chance to take greater control of the business and offer long-term security.  

Well established with the locals and a popular stop-off for visitors, our borrower will continue to trade as he has been since taking up occupation.  
On the rent versus debt servicing costs alone, the acquisition made sense. There are some medium-term targets for improvement in the business but, for now, it’s all about dusting down the tables for the regulars returning after months of lockdown.  
We are proud to lend in situations where others cannot and are committed to supporting local UK businesses when it matters most.

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