Can I obtain a pub acquisition loan to purchase a freehold or a leasehold?

Summary: Yes — you can usually secure finance to buy a pub whether it’s a freehold or a leasehold. The appropriate product depends on whether you’re buying the property (freehold) or taking on a lease (leasehold), the business cashflow and trading performance, your experience in hospitality and the lease terms. Lenders commonly use commercial mortgages for freeholds and business acquisition or specialist leasehold finance for leaseholds; bridging, secured business loans and vendor finance are also options. UK Business Loans is an introducer — not a lender. We can match you to specialist lenders and brokers for a free, no‑obligation eligibility check and tailored quote. Get a Free Eligibility Check — free, no‑obligation: Get Quote Now.

Quick answer: freehold vs leasehold — which can be financed?

Short answer: both freeholds and leaseholds are financeable, but lenders treat them differently.

– Freehold pubs: typically financed through commercial mortgages or specialist property finance. Underwriting emphasises the property valuation, condition, fixtures & fittings and the pub’s trading performance if the business is included in the sale.

– Leasehold pubs: usually financed with business acquisition loans, secured business loans or specialist leasehold finance. Lenders focus more heavily on lease terms (length, rent, review clauses), the underlying trading cashflow and any tie or management arrangements.

Note: UK Business Loans is an introducer — not a lender or regulated financial adviser. We’ll connect you with lenders and brokers who can give personalised quotes and advise on suitability. If you’re ready to compare options: Free Eligibility Check — free, no‑obligation.

Types of finance commonly used for pub acquisitions

Commercial mortgage for freehold pubs

Commercial mortgages are the most common route for freehold pub purchases. Lenders typically lend against the property value (building and sometimes fixtures & fittings) rather than goodwill alone. Typical features:

• Loan to value (LTV): often 60–70% typical ranges (varies by lender and location).
• Terms: 5–25 years dependent on lender and borrower profile.
• Interest: fixed or variable options are available; arrangement fees and valuation fees apply.

Business acquisition loan / secured business loan

For purchases that include equipment, stock and goodwill (and for leasehold deals), lenders will offer secured business loans. These can be secured against business assets and sometimes the owner’s property. Expect personal guarantees in many cases.

Bridging loans (short‑term)

Used where speed is essential (auction purchases, chains of sale). Bridging is fast but more expensive — typically covered by a short-term loan then repaid or refinanced by a commercial mortgage.

Vendor finance, earn-outs and conditional structures

Where sellers offer to take a portion of the purchase as deferred payments or vendor loans, this can reduce upfront deposit needs and bridge valuation gaps. These structures require careful legal drafting.

Specialist pub & hospitality lenders

The pub sector has specialist lenders and brokers who understand wet-led pubs, beer-tie arrangements, rent reviews and the particular cashflow patterns of pubs. Working with a specialist increases the chance of an appropriate product and realistic terms.

Key lender considerations for freehold vs leasehold

When assessing a pub acquisition loan, lenders typically examine a combination of property and trading factors. Here’s what matters most:

• Property valuation and condition — For freeholds the bricks-and-mortar valuation is central; for leaseholds the landlord’s position and the replacement cost of fixtures matter.
• Lease details (leasehold) — remaining term, rent & review pattern, service charges, repair obligations, break clauses and whether the lease offers security of tenure under the Landlord & Tenant Act.
• Trading history and cashflow — historic accounts, management accounts and credible 12–24 month cashflow forecasts are key, especially for leasehold buys where the business performance underpins repayment.
• Operator experience — lenders prefer experienced pub operators; first‑time buyers can still qualify but may face higher deposit requirements or guarantors.
• Credit & legal standing — both business and personal credit histories matter. Outstanding legal disputes or licensing problems can block finance.
• Deposit / equity — typical deposits can range 20–40% depending on the lender, lease length and risk profile.
• Tenanted vs managed — a pub with multiple tenant or management agreements will be underwritten differently than an owner‑operator wet‑led pub.
• Licensing & regulatory compliance — successful transfer of the alcohol licence is essential; lenders will check licensing arrangements and potential restrictions.

How to reduce lender concerns: produce clear forecasts, get a professional valuation, secure lengthy lease terms where possible, show evidence of deposit funds and provide a strong business plan.

Costs, taxes and legal items to budget for

• Deposit/equity — typically 20–40% (varies).
• Lender fees — arrangement fees, valuation and survey fees, and legal fees.
• Solicitor costs — lease review for leaseholds, title and conveyancing for freeholds.
• Stamp Duty Land Tax (SDLT) — payable on commercial freehold purchases above thresholds; check gov.uk for current bands.
• Licence transfer fees — costs to transfer the premises licence and any associated permits.
• Stock, fixtures & fittings valuation — these may be included in the purchase price and require separate valuation.

Always get independent legal and tax advice before committing. If you’d like lenders and brokers to estimate these costs for your deal, Get Quote Now — free and no obligation.

How to prepare to apply and speed up approval

Gather these documents to make the process smoother:

• Business plan and 12–24 month cashflow projections showing how loan repayments will be met.
• Historic accounts (2–3 years if available) and most recent management accounts.
• Details of the property: valuation, lease (if leasehold), fixtures & fittings list, inventory and stock levels.
• Proof of deposit/source of funds (bank statements).
• Personal ID, proof of address and director/shareholder information.
• Details of the alcohol licence and any planning consents.

Typical timeline (indicative): initial enquiry and lender match (hours–days) → lender review & conditional offer (1–3 weeks) → valuation & legal due diligence (2–8 weeks) → completion (subject to parties). You can speed things up by preparing documents beforehand and instructing a solicitor early.

Get a Free Eligibility Check — we’ll match your details to lenders/brokers who specialise in pub finance (loans from £10,000 and up).

Freehold vs Leasehold — practical pros & cons for buyers

Freehold — pros

• You own the land and building — potential for capital growth.
• More control over the premises and fewer landlord restrictions.
• Easier to use property as security for finance (commercial mortgage).

Freehold — cons

• Higher upfront cost and higher SDLT exposure.
• Responsibility for repairs, maintenance and business rates.

Leasehold — pros

• Lower upfront purchase price compared with freehold.
• Potentially quicker entry if the landlord is accommodating.

Leasehold — cons

• Ongoing rent obligations and potential rent reviews.
• Short lease terms reduce lender appetite and can require larger deposits.
• Lease clauses (e.g. trading restrictions) may limit how you operate the business.

Choosing between freehold and leasehold depends on your available capital, appetite for long‑term ownership and the particular site’s lease/legal conditions.

Real examples — mini case studies

Case A — Freehold buy by experienced operator
An operator with 10+ years in pubs bought a freehold for £800,000. A specialist commercial mortgage provided 65% LTV, with the lender accepting fixtures & fittings and historic trading figures. Completion after valuation and conveyancing took seven weeks.

Case B — Leasehold purchase by first‑time buyer
A first‑time buyer purchased a leasehold for £120,000 (premium) with a 15‑year lease remaining. The funding combined a secured business loan and a vendor‑deferred payment. The lender required a 35% deposit and a director guarantor; an interim bridging facility addressed a short timing gap.

Want help like this? Get Started — Free Eligibility Check.

Frequently asked questions

Can I buy a pub with poor credit?

Possibly, but options may be limited. Specialist lenders and brokers sometimes help borrowers with past adverse credit — expect higher rates or larger deposits. Speak to matched brokers for realistic options.

How much deposit do I need for a pub freehold?

Typical deposit ranges are 20–40% depending on lender, property and borrower profile. Exact requirements vary — get personalised figures via a Free Eligibility Check.

Can lenders value fixtures & fittings and goodwill?

Yes. Many lenders accept valuations for fixtures, fittings, stock and goodwill as part of the security and overall borrowing calculation.

Will I need a personal guarantee?

Often yes, especially for smaller companies or early stage operators. This depends on lender policy and borrower strength.

How long does a pub purchase typically take to complete?

Timescales vary: straightforward deals can complete in 4–8 weeks; complex deals (long leases, conditional sales, chain dependencies) can take longer.

Can you assist with tied pubs (beer‑tie)?

Yes — specialist lenders understand tied agreements, but these deals need careful underwriting. We can match you to brokers who have experience with tied models.

Will I pay Stamp Duty on a pub purchase?

Stamp Duty (SDLT) usually applies to commercial and mixed‑use freehold purchases above thresholds. Always check current rules or ask your solicitor.

Next steps — get matched with specialist pub lenders & brokers

If you’re thinking of buying a pub — freehold or leasehold — the fastest way to find suitable finance is to get a quick, free eligibility check. We’ll match your enquiry to lenders and brokers who specialise in hospitality and pub finance. Our service is free, no obligation and can save days of searching.

Get Quote Now — Free Eligibility Check (takes about 2 minutes). We’ll share your details with appropriate partners who can provide personalised quotes and next steps.

Privacy note: we only share your details with selected lender/broker partners relevant to your enquiry. Submitting an enquiry does not affect your credit score.

Compliance & disclaimer

Important: UK Business Loans acts as an introducer. We do not lend money or provide regulated financial advice. We will pass your enquiry to lenders and brokers who may contact you with offers. The information on this page is general in nature — it is not legal, tax or financial advice. For personalised advice please consult an independent adviser or solicitor.

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Related resources

• Business loans — overview
• Commercial mortgages
• FAQ
• Privacy policy
• Contact us

For more sector detail see our sector page on pubs business loans.

Suggested images (for the page)

• Image: Traditional British pub exterior — alt: “Traditional British pub exterior – freehold investment”
• Image: Pub bar interior with stools — alt: “Pub bar interior with stools – leasehold pub example”
• Image: Loan application checklist illustration — alt: “Illustration of loan application checklist”

If you’re ready to compare options and receive a free, no‑obligation eligibility check and personalised quotes, start now: Get Quote Now.

1. Can I get a business loan to buy a freehold pub?
Yes — commercial mortgages are commonly used to finance freehold pub purchases, subject to property valuation, trading performance and lender criteria.

2. Can I finance the purchase of a leasehold pub?
Yes — leasehold pubs are usually funded with business acquisition or specialist leasehold finance, with lenders focusing on lease length, rent obligations and cashflow.

3. How much deposit do I typically need for a pub purchase?
Deposits commonly range from 20–40% depending on the lender, lease term, property location and operator experience.

4. Will lenders require a personal guarantee for pub finance?
Often yes — many lenders ask for personal guarantees, especially for smaller companies, first-time buyers or higher-risk deals.

5. Can I get a loan for a pub if I have bad credit?
Possibly — specialist lenders and brokers work with businesses with adverse credit, but expect higher rates, larger deposits or additional security.

6. What types of finance are available for pub acquisitions?
Typical options include commercial mortgages, secured business/acquisition loans, bridging loans, vendor finance and sector-specialist pub lenders for tied models.

7. How long does it usually take to get pub finance approved and complete a purchase?
Indicative timelines are: initial lender match in hours–days, conditional offers in 1–3 weeks, valuation and legal due diligence in 2–8 weeks, with completion varying by complexity.

8. Will submitting a free eligibility check affect my credit score?
No — submitting an enquiry to UK Business Loans for a free eligibility check does not affect your credit score; lenders may run checks later if you progress.

9. What documents should I prepare to speed up a pub loan application?
Prepare a business plan and 12–24 month cashflow forecasts, historic and management accounts, property details or lease, proof of deposit, ID and licence/planning paperwork.

10. How much can I borrow for a pub or hospitality business?
Loan sizes vary widely — partners offer finance from around £10,000 up to several million depending on the security, business performance and lender appetite.