Licensees loaned £138m to pubs and bars during Covid

According to private equity investment firm Growthdeck, the amount of money lent by UK pub and bar owners to keep businesses afloat last year hit £138M.

The study showed 1,730 company directors were forced to take loans from their own personal resources, many of which were in excess of £200,000.

Traditional funding options restricted 

Growthdeck investment director, Steve Talbot, said: “The pub and bar sector has endured a difficult 18 months.

“Many owners have had to use their own money to stay in business as traditional funding options have been restricted.”

Licensees are likely to have found it difficult to access funds through CBILs and BBLs as lenders favoured other sectors such as tech and healthcare as well as other SME businesses deemed to be a lower risk.

However, data from the Coffer CGA Business Tracker showed an increase in domestic tourism, which saw a 35% increase in the number of ‘staycations’, provided a boost to the UK hospitality sector with sales in pubs and bars 35% higher in August 2021 compared to the previous year and 5% higher than August 2019.

Talbot added: “A lot of competition has been removed from the industry and the prospect of a bounce back in trading for the right concepts looks strong.

“Pub and bar companies with access to the right finance have an excellent opportunity to expand and grow.

“Investors should not underestimate the considerable growth potential of the hospitality sector.”

£4.3m of growth funding for new bar group

Earlier this summer, Growthdeck closed £4.3m of growth funding for new bar group Maven Leisure, completing the investment firm’s largest single raise.

Maven Leisure is looking to open at least seven premium bars in central London supported by this funding.

The funding has been structured as £2.3m in EIS-qualifying equity and £2m in mezzanine deb and will be used to take advantage of very favourable conditions for acquiring prime landmark London sites.