Punch host can't buy pub
A Punch tenant says his bank's decision not to lend him money to buy his pub's freehold defies logic.
John Chapman asked NatWest for a loan of £275,000 to buy the Kings Arms in Middlewich, Cheshire — Punch has invited all its tenants and lessees to make an offer for their pub's freehold.
Chapman would pay back £1,600 per month — his current rent is £2,000 — and he would benefit from cheaper beer. Turnover is around £200,000.
He said savings would be invested into the business, with a new kitchen and B&B accommodation planned. Drinks would be sold slightly cheaper to attract trade.
Chapman said he was told by his bank that pubs are considered "high risk". His MP Anne Winterton has now passed on his concerns in letters to Ian Pearson MP, Economic Secretary to the Treasury, and NatWest itself.
"I've been banking with NatWest for longer than 14 years. I thought they would walk in and say it's not a problem.
They refused me on the grounds that it's not viable. I don't see the logic.
"Gordon Brown has said the banks have got to lend to small businesses. The banks are not listening."
The Kings Arms was valued at £451,000 in 2005 and Chapman said it's still worth a similar amount. The £275,000 figure factors in the value of his Greenalls lease, which allows for cost-of-living rent increases only every three years.
