Banks are lending, but at a price

By Hamish Champ

- Last updated on GMT

Related tags: Pub operators, Money, Finance, Economics

Small pub operators looking to banks for funding may well get the money they are after but they'll have to pay higher fees and other charges, new...

Small pub operators looking to banks for funding may well get the money they are after but they'll have to pay higher fees and other charges, new research has found.

Findings from a survey conducted by the Institute of Chartered Accountants of England & Wales (ICAEW) suggested that while there is a limited appetite to take on new debt - thanks to the tightening economic environment - 68 per cent of the small businesses it had polled were successful in getting refinancing.

However in the current environment banks were charging more in fees, with 58 per cent of those renewing an existing debt facility reporting an increase in the interest they were being charged, and the same percentage citing a rise in arrangement fees.

Nearly a third of businesses reported experiencing some pressure from their main lender in the past 12 months to alter the terms of their main debt facility.

Clive Lewis, head of enterprise at the ICAEW, said a new-found financial discipline meant small businesses were reining in their debt. "This has also been influenced by having to pay a higher price for new debt facilities," he added.

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