Opening a bar or running a profitable pub is not an easy task, especially in challenging times for the UK's hospitality sector. As publicans battle rising rents, business costs, changes in consumer spending and economic pressures, pub finance can provide a crucial buffer when cash is tight or a growth tool to invest in key assets without large upfront costs.

We explore finance options for new businesses entering the industry and established pub and bar owners seeking funding solutions to help them modernise, adapt and keep the pints flowing.

What kind of finance can I get for a pub business?

Various types of pub finance are available that serve different purposes, from commercial mortgages and development finance for buying or expanding premises to asset finance, working capital finance for managing cash flow or flexible business loans to support various operational needs. 

It’s a tricky time for publicans and those opening new pubs in Britain. In mid-2025, the industry’s trade body, The British Beer and Pub Association (BBPA), said it expected over one pub a day to close in the UK during the year. 

While the BBPA has urged the government to do more to support UK pubs, beyond things like business rates relief, greater access to finance is vital to address growing economic challenges and cover key costs of running a pub.

Here are some common costs pub owners need to cover:

• Getting set up – this includes sorting out licences, taking out insurance and ticking off business and tax registrations, plus other legal considerations
• Secure the right premises
• Purchasing key assets and equipment – including kitting out premises, upgrades and refurbs or implementing tech systems and payment solutions 
• Managing cash flow and covering unexpected expenses
• Seasonal staffing and inventory to meet demand
• Regular financial commitments – from payroll and tax to bills, rent and supplier payments 
• Marketing and advertising efforts
• Website and booking system maintenance
• Events management
• Security, health and safety and hospitality-related compliance 

Certain finance facilities suit different funding and operational needs mentioned above. We’ll take a look at each of the main pub finance solutions in the next section. [Anchor link] 

Can I get finance to buy a pub?

Yes, you can get finance to buy a pub or bar, either to acquire an existing business or purchase premises to use as a pub. You have the option to use a commercial mortgage or other forms of property financing, or you could use a bridging loan if you need a short-term solution to cover any funding gaps for an acquisition. This latter form of financing includes an exit strategy, such as the sale of existing assets/property or securing long-term funding to manage the debt.

Main pub finance solutions to consider

Finance for pubs can be handy in numerous scenarios, from covering cash flow gaps and ramping up staffing and stock in peak seasons to revamping facilities. And they can also be a lifeline for pub owners who run into financial difficulties or issues out of their control. 

Many pubs are still dealing with financial pressures stemming from COVID, such as deferred liabilities and ongoing recovery loan repayments, compounded by high energy prices, inflation and increased operating costs.

Luckily, there is a range of options available. Here are the main pub finance solutions you may want to consider: 

Short-term loans

A short-term loan can be a convenient way to borrow money for just the time you need it, repaying in instalments over months, not years, without getting tied into lengthy debt finance agreements. These are usually unsecured business loans, particularly those offered by alternative and digital lenders, like iwoca. They provide faster access to funds for a range of business purposes, without needing assets for collateral.

How pubs can use short-term loans

Short-term, flexible loans can help pub owners cover temporary or sudden operational costs, such as fixing kitchen appliances, funding increased stock ahead of a big event or festive period, or easing cash flow during quieter months, paying capital as revenue grows.

Merchant cash advances

A merchant cash advance (MCA) is a form of revenue-based funding that offers companies a lump sum to repay as a percentage of future card sales. The finance model aligns borrowing with cash flow, which is ideal for pubs and other hospitality businesses.

How pubs can use MCAs

MCAs are ideal for pubs with strong card sales (and many providers have minimum turnover thresholds), while the flexible repayment structure suits seasonal revenue fluctuations, and the contrast between takings at the weekend and during the working week.

Business credit cards and lines of credit 

If you’re not sure how much capital you need, a business line of credit enables you to borrow up to an agreed limit and only pay interest on the amount you use, which is a cost-efficient form of borrowing. 

Business credit cards function as a short-term credit facility for regular commercial expenditure while helping to build business credit. But credit card interest rates and fees are often much higher than other pub finance solutions. 

How pubs can use credit cards and lines of credit

Business credit cards have various benefits and operational purposes, and can be used by approved employees, while managers and senior staff can control spending limits. A line of credit is helpful for pubs needing a flexible finance facility and revolving credit line to scale up and down during Easter, Christmas and when beer gardens are packed in the summer (or for big sporting events).

Commercial mortgages and property finance

This is your go-to option for acquiring a pub or new commercial property, or when planning a major upgrade to your premises. Commercial mortgages, secured against your property, can provide access to large amounts of capital borrowing to spread property costs over a long period.

Also consider other forms of property finance, such as development loans, which have staggered capital releases during construction projects. Or you could source pub lease finance from certain specialist lenders to cover initial pub leasehold costs and potential renovations required. 

How pubs can use commercial mortgages

Commercial mortgages are suitable for pub owners seeking to purchase new premises, buy the freehold from a brewery, acquire a second location or significantly expand current sites. Development loans can support things like, such as kitchen refurbishments, beer garden expansion or other construction costs.

Asset finance

If you've got premises or you’re in the midst of refurbishment or expansion, asset finance can help you spread the cost of new equipment. Coming in various forms, from hire purchase to finance leasing agreements, they’re secured against the value of an asset being hired or acquired..

How pubs can use asset finance

Asset and equipment finance covers various assets, including hard assets like kitchen equipment, bar and outdoor furniture and delivery vans, to soft assets like security systems and POS solutions.

This form of finance supports pub growth plans without draining cash reserves, while having flexible options, including some that serve more temporary needs, in which you never own the assets outright.

Invoice finance

Using invoice finance allows businesses to unlock cash tied up in unpaid client invoices by borrowing against their value. Providers offer an advance of the vast majority of their value upfront (typically between 80 and 95%), with the remaining amount (minus fees) transferred once clients pay what they owe.

How pubs can use invoice finance

Choosing between invoice discounting, factoring solutions and selective invoice finance (depending on discretion, control and usage preferences), pubs can use the facilities to access key working capital faster, ease cash flow and accelerate operations during key seasons.

Inventory finance

Used for very specific purposes, inventory finance provides funding for businesses that need to increase stock levels to meet customer demand, using that stock as security. It’s a type of working capital loan that suits those operating in the hospitality and retail sectors.

How pubs can use inventory finance

This is an ideal facility for publicans who need to increase inventory ahead of key sales periods or those looking to diversify stock (think craft beers and seasonal menus). It can also support pubs with large cellars, or if you’re looking to enjoy discounts for larger bulk orders. 

Crowdfunding

If you want to branch out from debt finance and seek investment, crowdfunding is an increasingly popular way to raise funds with the support of your community and customers. By creating an eye-catching campaign on platforms like Kickstarter or Crowdcube, you can attract input from ordinary (and numerous) people. This not only provides the crucial growth capital but also gauges support levels, increases reach and helps build a loyal customer base.

How pubs can use crowdfunding

Crowdfunding is ideal for pubs planning big changes or new initiatives, such as opening a new branch or microbrewery, or launching a unique service or event, without taking on any debt burden. Rewards offered can build buzz and drive engagement, but consider the pros and cons of giving up some equity and control in your business, depending on the crowdfunding platform you use.

Trade credit 

Entering into trade credit agreements with suppliers helps pubs manage cash flow when buying stock, such as beer, wine, spirits, food, and other supplies and tools. Arranging more time to pay for goods or services, say within 30–60 days, gives you room for manoeuvre, and responsible use of this interest-free source of credit can lead to strong relationships and better future terms and deals.

How pubs can use trade credit

Breweries and wholesalers often offer trade credit to pub and bar owners, helping to maintain a consistent supply without large upfront outlays. It’s especially helpful during busy periods, such as stocking up for Christmas or ahead of events.

How to choose the right pub finance solution for your business 

Choosing the right loan for your pub requires careful consideration. You need to define your financial needs, determine the affordability of differing lending options and decide on your priorities.

Here are some key things to consider when choosing between different pub loans and finance solutions: 

• What are your cash flow projections?
• How much capital do you need and for what purpose?
• How quickly and for how long will you need the capital?
• What level of flexibility do you get with each finance solution, and what is the overall cost of borrowing? 
• What is your preferred repayment model or method/source of funding?

Weigh up the pros and cons of different solutions and compare prospective provider features, benefits, costs, tax implications, and more. The right pub loans, finance facilities or investment sources should align with your specific funding requirements, operational needs and growth goals. 

How to apply for a pub loan

The application process for a pub loan depends on the option you choose. Traditional bank loans for pubs can take between days or even weeks, with a combination of phone, in-person and online communications. They’re often subject to strict eligibility requirements and usually involve providing assets as security and extensive paperwork to support your application. 

When using a digital lender like iwoca, applications take a matter of minutes, with a slick online process, powered by automation and platform integrations for rapid approvals (typically within 24 hours). We focus on business plans, cash flow and profitability, putting less emphasis on credit scores.

Pub finance and loan providers will want to know some or all of the following, depending on the type of loan and lender used:

• Key business details, including those of owners and directors
• Trading history and business entry/structure
• Business plan and funding purpose
• Certain financials, including turnover, cash flow statements, business bank statements, etc
• Tax position and recent returns 
• Details of existing credit facilities from banks, lenders or suppliers 
• Value of assets you intend to use as collateral (if applying for a secured loan) 

When speed and flexibility matter, an iwoca Flexi-Loan has you covered. We can provide approval decisions within a day, and successful applicants often get access to funds in a matter of hours.

Borrow between £1,000 and £1 million for a few days, weeks or up to 60 months, supporting short- and longer-term funding needs. You only pay interest on what you draw down, and you can repay the loan early, free of charge.

Learn more about how to apply and the benefits of our business loans for SMEs, or use our handy loan calculator to see what your likely repayments will be.

‍