What lender or broker criteria are commonly used for pubs and bars?

The quick answer — the core criteria pubs and bars are judged on

Pubs and bars are typically assessed on four pillars: trading performance and affordability, premises and licensing, management and credit profile, and available security or repayment data. Lenders and brokers look for clear evidence that the business can afford repayments year-round, operates compliantly, and is run by experienced operators with a stable credit history. The exact criteria vary by product type, but the fundamentals remain consistent across most UK commercial funders.

Expect providers to analyse bank statements, card takings, EPOS reports, VAT returns, and management accounts to verify revenue stability and cash flow cover. Premises details matter too — freehold or leasehold status, lease term remaining, tie status, and rent-to-turnover ratio can all influence eligibility and pricing. Management track record, licences in good order, and transparent financials give lenders confidence in hospitality businesses with seasonal cash cycles.

For unsecured loans and revolving credit, affordability and creditworthiness drive decisions. For merchant cash advances, card turnover and seasonality are key. For asset and fit-out finance, the value and lifespan of fixtures, fittings, and kitchen equipment are central. Where property is offered as security, loan-to-value (LTV), valuation, and title clarity become critical underwriters’ checks.

What documents do pubs and bars usually need?

Most providers ask for six to twelve months of business bank statements and recent card processing statements. Management accounts, filed accounts, VAT returns, EPOS/till Z-report summaries, and a premises licence copy are commonly requested. A business plan, cash flow forecast, and a directors’ CV can strengthen an application, especially for growth or refurbishment projects.

How do brokers use these criteria?

Specialist brokers pre-screen applications against the above criteria to match you with lenders that are actively supporting pubs and bars. They also identify red flags early — short leases, high rent burden, HMRC arrears, or sharp seasonality — and help you package mitigations. That packaging can materially improve placement, speed, and pricing outcomes.

Trading performance and affordability tests

Providers start with turnover trends, gross margins, and cash flow. They will look at wet vs dry sales mix, food gross profit, staff costs as a percentage of sales, and energy costs trajectory. Consistency of takings, not just growth, is important for hospitality where trade is often cyclical or event-led.

Bank statements and card processing data are used to validate revenue. For merchant cash advance (MCA), lenders commonly target a percentage of card takings for repayment, so minimum monthly card volume and variability are assessed. For term loans, lenders typically apply an affordability test using a Debt Service Coverage Ratio (DSCR), with many seeking a DSCR of around 1.2x–1.5x, depending on risk appetite and product.

Seasonality is not a deal-breaker if you show prudent cash management. Seasonal cash flow forecasts, proven winter trading, event calendars, and pre-booked functions are all positive signals. If the site has undergone changes — new menu, garden investment, live music, or sports rights — provide before-and-after data to show uplift and resilience.

What about existing debt and HMRC?

Lenders check total debt service as a proportion of cash flow to ensure borrowing is sustainable. They will ask about any BBLS/CBILS legacy facilities, bounce-back top-ups, brewery loans, or supplier finance. HMRC Time to Pay arrangements are not uncommon in hospitality, but undisclosed arrears or frequent missed payments will reduce options and increase rates.

What operational metrics help?

Useful benchmarks include weekly covers, average transaction value, food hygiene rating, online review trends, wastage controls, and stock turn. Staff cost as a percentage of sales and energy costs as a share of turnover are often queried, especially after utility price volatility. If you have EPOS category data and shift productivity reports, include them to demonstrate operational control.

Premises, licences, and leasehold/freehold considerations

Premises status influences available products and pricing. Freeholds can unlock secured lending and asset-backed options with potentially lower rates. Leaseholds often rely on unsecured or cashflow-led lending, but lenders will still assess the quality and length of the lease and any assignment or repair obligations.

For leaseholds, many providers prefer a minimum five to ten years unexpired term or robust options to renew. Rent-to-turnover is a key metric; a high rent burden can strain affordability, especially in shoulder months. Confirm whether the pub is tied or free-of-tie, list any beer flow monitoring or supply obligations, and disclose machine income arrangements.

Licensing must be clean and current. Lenders commonly ask for copies of the premises licence, designated premises supervisor (DPS) details, and evidence of any conditions. Any enforcement history, noise complaints, or restrictive hours should be disclosed, with mitigation steps if applicable.

What building, planning, and compliance items matter?

For refurbishments, lenders consider planning status for changes of use, listed building constraints, and landlord consent. Evidence of PRS/PPL music licences, gas and electrical safety certificates, and public liability insurance is often requested. Strong food hygiene ratings and recent Environmental Health Officer reports strengthen the compliance profile.

How does location affect appetite?

Lenders favour sites with durable footfall drivers: dense residential catchment, commuter hubs, tourism, or destination dining credentials. Rural sites can still be attractive with accommodation, events, or food-led strategies. Provide context on competition, local demographics, and any seasonal tourism factors that influence trading.

Management, risk, and documentation lenders expect

In hospitality, the operator’s capability is pivotal. Lenders and brokers value sector experience, evidenced by CVs detailing previous tenures, turnarounds, award recognition, and training certifications. A concise business plan describing the concept, menu, wet/dry mix, events strategy, staffing, and supplier relationships adds credibility.

Directors’ and business credit histories are checked for CCJs, defaults, or insolvencies. Many lenders require personal guarantees for limited companies, especially for unsecured lending. Where property is available, secured options may reduce reliance on guarantees, but affordability and conduct still drive decisions.

Good documentation speeds approvals. Typical packs include filed accounts, year-to-date management accounts, rolling 12-month cash flow forecast, bank statements, card merchant statements, EPOS summaries, lease or title documents, insurance, licences, and ID/AML checks. If you are funding a fit-out, include quotes, timelines, and a capex schedule with contingencies.

What risks do lenders look to mitigate?

Main risks include volatile takings, short or onerous leases, high rent and rates burden, HMRC arrears, staff shortages, and utility cost exposure. Lenders prefer to see forward bookings, supplier continuity, and energy contracts that are priced sensibly. Showing how you manage peak vs off-peak staffing and wastage can help address margin volatility.

How brokers optimise placement for pubs and bars

Specialist brokers segment your profile across product sets — unsecured term loans, revolving credit, MCA, asset finance, fit-out finance, and government-supported schemes. They package your strengths, position mitigants for any weaknesses, and approach funders most receptive to hospitality. That targeted approach often reduces declines and prevents unnecessary credit searches.

Finance options, steps to prepare, FAQs, and next actions

Common finance routes for pubs and bars include unsecured business loans for working capital, revolving credit facilities for flexibility, and merchant cash advances repaid from card takings. Asset and equipment finance support kitchen kit, furniture, AV, and cellar upgrades, while fit-out finance funds refurbishments and rebrands. Selected lenders also offer facilities under government-backed programmes, subject to eligibility and availability across the market.

Eligibility thresholds vary by provider and product. Many unsecured lenders prefer at least 12 months of trading, a minimum monthly turnover, and clean recent banking conduct. MCA funders often seek minimum card takings, diversified transaction volumes, and clear seasonality patterns for repayment flexibility.

To go deeper on options specific to your venue, explore our sector guide: pub business loans and finance for pubs and bars. It outlines use-cases such as refurbishments, garden expansions, kitchen upgrades, and energy-efficiency improvements. You can also submit a Quick Quote to check likely eligibility before any commitment.

How to strengthen your application in 7 practical steps

• Prepare 12 months of bank statements, recent card statements, and EPOS summaries by category.
• Update year-to-date management accounts and a simple 12-month cash flow forecast with seasonality assumptions.
• Document lease terms, rent reviews, tie status, and any landlord consents needed for planned works.
• Gather licences, insurance, safety certificates, and your food hygiene rating.
• List capex needs with quotes and a timetable for fit-out or equipment upgrades.
• Explain any HMRC Time to Pay agreements or historic credit issues with supporting evidence.
• Include a one-page management CV and a concise business plan highlighting your trade drivers.

FAQs: lender and broker criteria for pubs and bars

What credit score do pubs need?

There is no universal minimum score, but stronger credit files improve placement and pricing. Lenders review both business and directors’ credit alongside banking conduct. Clean recent conduct often matters more than a single old marker.

How long should a pub have been trading?

Many unsecured lenders look for at least 12 months’ trading, while some MCA providers can assess from six months with sufficient card takings. Longer trading history with stable takings widens options and may reduce cost.

Does a tied lease reduce eligibility?

A tie is not automatically negative, but lenders will consider beer pricing, machine income splits, and the rent burden. Clear profitability and cash flow cover can offset constraints tied to supply agreements.

What DSCR do lenders look for?

Many target a DSCR around 1.2x–1.5x, adjusted for seasonality and product risk. Evidence-based forecasts and sensible add-backs help demonstrate affordability against that range.

Will I need a personal guarantee?

Personal guarantees are common for limited companies seeking unsecured facilities. Secured options or asset-backed finance may reduce the reliance on guarantees, subject to valuation and underwriting.

Key takeaways

• Expect scrutiny of cash flow, seasonality, lease terms, licensing, and management track record.
• Trading evidence from bank, card, EPOS, and VAT returns underpins affordability and pricing.
• Lease length, rent-to-turnover, and tie status influence appetite, but strong margins can offset risks.
• Prepare documents early to speed decisions and improve outcomes.
• Different products use different criteria — match your needs to the right facility type.

How Best Business Loans can help

Best Business Loans is an independent introducer that helps UK hospitality operators compare and connect with suitable lenders and brokers. We use intelligent matching to save you time and avoid misapplied applications. Submit a Quick Quote for a free, no-obligation eligibility check and introductions to relevant providers.

Important information: We do not provide loans or financial advice. Eligibility, rates, fees, and terms are set by providers and depend on your circumstances. Security or personal guarantees may be required. If debt is secured on property, your property may be repossessed if you do not keep up repayments.

Updated: October 2025