For full functionality of the Fleurets website it is necessary to enable Cookies. Please refer to your browsers instructions for enabling cookies. Click here for more information

Allow Cookies

We use cookies, just to track visits to our website, and to help deliver content tailored to you.
If you continue then we assume that you consent to receive all cookies on this website. What are cookies?


Finance market update and overview

03/08/2023 12:19:00

With continuing increases of the Bank of England base rate, money has quickly become more expensive, but there are still lots of people seeking debt finance in the leisure sector, whether this be for a new purchase/expansion, refinance or for CapEx.

One of our funding partners, Sirius, spoke to us about their experience and observations on the current market along with some top tips for raising finance in this specialist sector:

  1. We have seen an increase in the number of closed pubs being acquired that are using short term funding solutions. We have a number of lenders who love these deals and can typically lend more to Sirius clients, at preferential interest rates, due to our relationship and "preferred broker" status.
  2. There has been a significant increase in tenants agreeing terms to acquire the freehold interest of their pubs, whether this be from the corporates or from private landlords. We currently have over half a dozen of these deals in progress and we can access special deals for these situations.
  3. We have seen an increase in clients looking to raise capital, either by way of unsecured loans or refinance to cover the cost of capital expenditure. This is typically for refurbishment or an extension to the property - for example, adding a conservatory in order to increase the restaurant covers, or, adding new letting rooms. This might be linked to operators trying to diversify to help "futureproof" their business. We have seen a focus on food, letting rooms, outdoor landscaping and wedding license applications.
  4. For many clients buying trading businesses, some of the banks now apply a "stress test" to the P&L Accounts when assessing a business's ability to service debt. When it comes to gas/electric, for example, if in 2022 the business spent £30k on utilities, they will apply a multiple of 3 x to this figure, so will deduct another £90k from the EBITDA/R in order to get an accurate picture of real liquidity.

The Do's and Don'ts for raising finance in the licensed leisure sector


  • Get specialist advice on the debt market, it can be a minefield
  • If you are a tenant, ask your landlord whether they would consider selling you the freehold interest - some loans can cost the same (or less) to service than your annual rent
  • Consider asset management - can you increase the number of covers, or add/convert letting rooms to
  • Work with a good broker who can manage the whole finance process for you and offer help and advice when required
  • Use a SWOT analysis when considering a proposition (Strengths, Weaknesses, Opportunities, Threats)
  • Explore ways of fixing the cost of utilities and introducing eco-friendly elements to the business/property (bank's cover this as part of their due diligence)



  • Just speak to your own bank, as lending policies around sectors often change from lender to lender
  • Assume you cannot afford to buy a business, as there are often alternative ways of making a commercial proposition work
  • For property transactions, don't use the family solicitor or one who is a generalist or who has a residential focus
  • Be afraid to ask for help: - whilst you might be the best operator in town, creating business plans and cashflow models might not be straightforward
  • Discount freehold business opportunities which are closed, or have no trading accounts - there's ways of funding these
  • Expect a lender to rely on forecasts and projections to prove a loan can be serviced


If you need confidential financial advice or would just like to discuss the current market, we would be delighted to hear from you. Click here to get in touch or to find your nearest Fleurets office.