In a bid to address the impact of the Covid-19 crisis and three-month enforced pub closure, 180-pub operator Red Oak Taverns has used funds secured via the Government’s CBILS as a standby facility to ensure the business has the required liquidity to deal with potentially uncertain times ahead.
Provided by the pub group’s lending partner OakNorth Bank, the £2.6m loan is designed to help Red Oak gradually rebuild its trade over the coming months as well as safeguard the business in the event of a second lockdown.
The operator joins the likes of the Coaching Inn Group in utilising the Government's CBILS.
Flexibility and comfort
Founded in 2011 by entrepreneurs Aaron Brown and Mark Grunnell, Red Oak has twice tapped an existing £42m OakNorth facility to purchase 19 pubs and grow its business from 161 to 180 pubs throughout the UK.
These 19 pubs comprised 18 tenanted and leased pubs from Wadworth and one further individual site.
“Over the years, OakNorth Bank has been incredibly supportive of our vision and business model,” Mark Grunnell, co-founder and chief executive of Red Oak Taverns commented.
“These are unprecedented and uncertain times. We do not have the comfort of overdraft facilities or revolving credit facilities so accordingly, securing this standby capital gives us the flexibility and comfort to focus on our wider business, to support our hard working tenant partners and to safeguard our business for the long-term.
“We are fortunate to have a trusted lender and partner that understands the requirements of our business, like OakNorth Bank.”
Hard hit sector
OakNorth Bank’s senior debt finance director Mohith Sondhi added: “With hospitality and dining being one of the hardest hit sectors, it’s instrumental we continue to lend to businesses that were and, continue to be, profitable and successful prior to the crisis, such as Red Oak Taverns.
“Under Mark and Aaron’s management, Red Oak Taverns has provided support packages to all of their pubs including substantial rent concessions, complimentary personal protective equipment packages, purchasing additional garden furniture to maximise outdoor occupancy and implementing an order and pay app to minimise contact and to better protect staff and patrons.
“Having the additional liquidity CBILS provides, positions Red Oak Taverns well to weather this and any future COVID-19 storms.
“We are proud to be associated with Red Oak Taverns and look forward to working with Mark and Aaron in the current period and in the future. It’s an excellent business with a fantastic management team.”