A financial guide to buying a pub
Before embarking on securing finance against a licensed business, you must first ensure that your own finances are in good shape. If you have CCJ's and the like against your name, they need to be addressed.
Likewise, you will need to give lenders confidence that you know how to manage money and well-organised private finances and good track record, go some way to doing this.
Modern day lenders will also want to be confident that you have the necessary skills to run a licensed venue - no experience is likely to equal no funding.
If you are new to the trade, don't be disheartened, experience now, perhaps working for one of the big operators, will save you money in the long-run as you collect excellent trade knowledge and get to grips with best practice.
What are you looking for?
Whilst not central to funding, the process of getting the right venue, one that matches your skill sets and ambitions, is greatly improved if you have a clear vision of what you are looking for. To help this process along, ascertain what you can afford, then contact a leading licensed property agent who will act as a match-maker.
Securing finance
Make a list of all assets including property and cash available to you. Be honest with your valuations, especially where houses are concerned. Also, get up to date settlement figures for mortgages and loans, sometimes they need to be replaced, and a hefty penalty might leave you short on the day of completion.
Going through the hoops to secure finance means you'll be asked to answer a lot of questions. Be honest in your answers. If something that you have said, later turns out to be untrue, you may lose your deal, have incurred charges, and you run the risk of prosecution.
A clear vision
Working with a specialist broker, you'll need to formulate a business plan. This isn't necessarily a long document, but is based on "tell us how you will operate, what you will change" etc. The plan must carry your ambition and enthusiasm, but ultimately, must convince the lender that the business can support the borrowing.
Specialist brokers would always view these business plans in the same way that banks do, to avoid delays and potential disappointment. In your preparations, you must have the attitude that this is your one shot at this.
The reality is that if your proposal is declined, it is registered with the lender and as such, won't be reconsidered. So work with experts and get it right first time.
