How to buy a pub with a mortgage

Buying a pub is a commercial purchase, so the finance is usually arranged through a commercial mortgage rather than a residential loan. Lenders will focus heavily on the pub’s trading performance, the strength of your plan to operate the business, and the legal structure of the property you’re buying.

This guide outlines the main mortgage types used for pub acquisitions, the typical application process, and the factors that can influence how lenders assess affordability.

Can you get a mortgage to buy a pub?

Yes—it’s typically a commercial mortgage. Not every lender offers pub lending, and even where they do, they may apply specific requirements around the type of tenancy, the lease terms, the business model, and the borrower’s experience.

In practice, pub purchases often involve a mix of property and business risk. That means lenders will usually want evidence that the pub can generate sufficient cash flow to service the debt.

Freehold or leasehold: what are you actually buying?

Before you apply for finance, it’s important to understand whether the deal is structured as a freehold or leasehold purchase.

Leasehold pub mortgage (common)

With a leasehold structure, you typically acquire the business and the right to occupy the premises under a lease, rather than owning the building outright.

Key points lenders may consider include:

• Lease length: many leases are time-limited, and the remaining term can affect long-term lending.
• Repair and maintenance responsibilities: you may still be responsible for maintaining the property to agreed standards.
• Tied arrangements: some leases require you to buy beer, cider, or other products from a particular supplier (often a brewery or wholesaler).

Freehold pub mortgage

A freehold structure means you own the building and the property outright, along with the business.

This can be attractive because it offers greater control over the asset and trading arrangements, but it may come with:

• Higher purchase costs compared with leasehold deals
• More capital required to secure the property

How to get a pub mortgage

While each lender’s process differs, most pub mortgage applications follow a similar sequence.

1) Prepare your paperwork and build a credible business plan

Commercial mortgage applications are document-heavy. Lenders will typically want to see how the pub currently performs and how you intend to improve or sustain trading.

Common elements include:

• Trading accounts and financial history (where available)
• Income projections based on realistic assumptions
• A cost budget covering operating expenses and any planned changes
• Licences and compliance (for example, personal and premises licensing)
• Evidence of experience in hospitality or running similar businesses

A strong plan doesn’t just show expected turnover—it should explain how the pub will generate enough profit/cash flow to meet repayments.

2) Work through the deal structure and property details

Your solicitor and broker will usually help ensure the finance aligns with the legal and commercial terms of the purchase.

Lenders may scrutinise:

• Lease terms (if leasehold)
• Any restrictions on trading or purchasing products
• The condition of the property and responsibilities for repairs
• The suitability of the premises for the intended business model

3) Submit an application to a lender that fits the pub and borrower profile

Not all commercial lenders will consider pub purchases, and some may prefer certain types of lease, borrower experience, or trading profiles.

A good approach is to match the application to lenders whose criteria are more likely to align with:

• The pub’s trading history
• The proposed purchase price and loan amount
• Your background and ability to run the business

Eligibility factors lenders commonly assess

Pub mortgage lending is often assessed on a combination of business performance and property security. While criteria vary, lenders frequently look at:

• Business plan strength: whether projections are supported by evidence and sensible assumptions—especially if the pub’s earnings don’t fully cover repayments.
• Hospitality experience: many lenders expect relevant experience running a pub or similar operation. Where experience is limited, some lenders may look for compensating factors such as a larger deposit or stronger support.
• Licences and compliance: having the right permissions in place (or a clear plan to obtain them) can be important.
• Previous trading accounts: lenders often focus on earnings metrics that reflect the pub’s underlying profitability.
• Location and trading environment: footfall, competition, and the local market can influence risk.
• Credit history: both personal and business credit history may be considered.
• Existing debts and commitments: lenders will review how other liabilities affect overall affordability.

Deposit requirements

Deposits for commercial mortgages are commonly higher than residential lending. A typical range is often around 30% to 45%, though this can vary depending on factors such as:

• The pub’s trading performance and stability
• The remaining lease term (for leasehold)
• The borrower’s experience and track record
• The perceived risk of the deal

In some cases, stronger experience and a proven trading record may support a lower deposit, but it’s not guaranteed.

Interest rates and repayment considerations

Commercial mortgage pricing can vary significantly based on risk and structure. Rather than focusing on a single headline figure, it’s usually more useful to consider what influences the cost of borrowing.

Common drivers include:

• Deposit size
• Loan-to-value and the security offered
• The pub’s trading history and projected cash flow
• Borrower experience and financial standing
• The term of the mortgage and any product features

Because pub lending is closely tied to business performance, repayments are often assessed against the pub’s ability to generate sufficient income—not just personal income.

Other finance options to consider

A mortgage may be the right route for many pub purchases, but it’s not the only way to fund a deal.

Releasing equity

If you already own property or have equity in another asset, releasing equity may provide funds for a deposit or part-payment, depending on your circumstances and existing lending terms.

Commercial bridging finance

Bridging can sometimes be used where speed is important, such as when exchanging and completing on a pub purchase quickly. It’s typically more expensive than longer-term finance, and it’s usually considered alongside a plan for permanent funding.

Development finance

If the purchase involves renovation, conversion, or building a pub from a site, development finance may be relevant. This type of funding is often delivered in stages and may require evidence of project experience, costings, and a clear plan for completion.

Getting the right mortgage structure for your pub purchase

The “best” mortgage for a pub purchase depends on the deal structure (freehold vs leasehold), the pub’s trading profile, and your ability to operate the business.

A well-prepared application typically connects the dots between:

• the property/lease terms
• the pub’s financial performance
• your operating plan and experience
• the amount you’re seeking to borrow and the deposit you can provide

Understanding these elements early can help you approach lenders with a clearer picture of what they’re likely to focus on.