Buying a pub is still a possibility
Credit crunch, liquidity issues and bankruptcy protection are all terms that have become second nature to the global population, with everyone now aware of the problems that face the major financial institutions.
It seems that every sector of this country's economy faces pressure in these testing times. No other sector has suffered at the hands of the media as much as the licensed trade, but it is not all doom and gloom for this great British institution.
If you need finance for your pub, restaurant or hotel - don't despair. With a little bit of ingenuity it is still possible to obtain funding for your business needs. You should note that business finance for a licensed venture is still available in many cases.
A professionally packaged application will still attract support from the right sources. It is important your broker has an excellent relationship with lenders and in-depth, industry-specific knowledge to ensure that your application has the best chance of success.
Are you a publican struggling to obtain short-term financial support? Several agents have access to innovative products that can help you secure finance. For example, some have found ways to allow you to borrow money on the strength of future debit or credit card transactions.
Flexible payments
Humberstones recently secured an advance of £20,000 for the tenant of a pubco lease pub to assist with the payment of a VAT bill. Even though this was for a purpose normally declined by mainstream lenders, it had no set-up costs, flexible repayment terms and no security was required.
There is also an attractive deal currently available for those looking to purchase a 'free of tie' lease. Loans are available for up to 60 per cent of the agreed purchase price through a government guarantee which provides lenders with protection against default in certain circumstances.
This is not only an attractive proposition for buyers but also for those who currently own freehold premises and wish to create a lease. It will give them confidence that their new tenant has the right backing to succeed and help ensure they receive their rent.
In order to secure the most appropriate deal for your needs your adviser must:
• have experience
• have a comprehensive knowledge of the sector
• have access to sources of funding
• be able to prepare a professionally packaged proposition.
For those who wish to purchase a business, find a broker who can offer its clients all of the above and more.
Find one who will:
• help with your search for a business
• review the accounts and suggest where savings and improvements can be made
• assist with making offers on your behalf for the business you wish to purchase
• offer help in the preparation of a robust business plan and obtain the funding from the most suitable source.
It is also advisable to select a broker who can help you choose the right solicitor and insurance package to suit your needs.
Andy Jones is Humberstones Leisure's director of financial services
