Commercial Mortgages for Hospitality Businesses
Buying a hospitality property — whether a pub, hotel, restaurant, or leisure venue — is both a business acquisition and a property purchase. A commercial mortgage provides the long-term finance needed to acquire the freehold, with the property and trading business as security.
Hospitality mortgage specialists value properties based on trading potential (EBITDA multiples or fair maintainable trade) rather than just bricks-and-mortar value. This means strong-trading businesses can borrow more than the property's vacant possession value.
Key Benefits
- Buy your freehold — stop paying rent to a pub company or landlord
- Valuation based on trading potential, not just property value
- Fixed rate options for budgeting certainty
- Capital improvements increase both trading and property value
Frequently Asked Questions
How are hospitality properties valued?
Specialist hospitality valuers assess the fair maintainable trade (FMT) — the sustainable level of trade a reasonably efficient operator could achieve. This may be higher than vacant possession value for well-located sites.
Can I buy a tied pub and convert it to free-of-tie?
Yes. Buying the freehold from a pub company removes the tie, allowing you to source your own beer and food. The cost savings from going free-of-tie can be significant and improve your mortgage serviceability.
What trading history is needed?
Typically 2-3 years of accounts. If you are buying from an existing operator, their accounts can support the application. First-time operators may need to provide a detailed business plan and demonstrate relevant experience.
Are alcohol licensing issues a concern?
Lenders will want confirmation that a premises licence is in place or transferable. Any licensing restrictions or reviews could affect the lending decision.
Related Funding Options
Commercial Mortgages UK
Long-term finance for buying or refinancing commercial property. Offices, shops, warehouses, and mixed-use premises for UK businesses.
Bridging Loans for Hospitality Businesses
Fast bridging finance for UK hotels, restaurants, pubs, and leisure businesses. Secure properties quickly and refurbish before peak season.
Unsecured Business Loans for Hospitality
Funding for UK pubs, restaurants, cafes, and hotels. Refurbishments, equipment, marketing, and working capital without property security.
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Learn About Our Broker NetworkCoreFi is a trading name of JG Core Ltd (Company #16218779, England & Wales). CoreFi acts as a commercial finance broker and does not provide regulated financial advice. All products described are unregulated business-to-business finance. Information on this page is for general guidance only and does not constitute a formal offer of finance. Terms, rates, and availability are subject to lender criteria and may change without notice.