Host sells bonds to clear pub debts

Mike Keen, licensee of the Brewery Tap, in Ipswich, is selling the £500 bonds to customers who will then get a 10% discount on food and drink, and free advertising for their company through the pub’s website.

Keen said he wants to raise at least £10,000, which will clear the pubs debts, through the 20 pledges of £500. He has attracted nine so far.

The landlord has promised to start paying back one bond per month from June next year, to a bond-holder whose name will be picked at random out of a hat.

Turnover at the freehold pub has increased from £4,000 to £40,000 since Keen took over two years ago. The 10% discount each bond-holding customer re-ceives will cost Keen 2.5% in gross profit. Average spend per head for food is £21.

“Giving bond-holders a discount will be offset by them choosing to come to our pub over the others in the area,” explained Keen.
The bond-holder will receive a letter stating the terms of the agreement. If Keen cannot pay off the bonds from June, he plans to sell the pub to pay back the bond-holders.

Keen added: “It’s a ridiculous attitude that the banks have towards pubs, especially at a time when Government is pushing banks to lend to small businesses. It’s just rubbish.

“These bonds will get rid of our debts and give us a bit of breathing space for the next six months.

“We currently pay more than £600 per month in debts, so we should be able to afford to repay the £500 bonds. And we have loads of Christmas bookings, and for weddings next year.”